Chapter 6: Risk Identification - Vocabulary

Question 1

Risk register

Answer 1

A tool developed at the risk owner level that links specific activities, processes, projects, or plans to a list of identified risks and results of risk analysis and evaluation and that is ultimately consolidated at the enterprise level

Question 2

Risk map

Answer 2

A template depicting the likelihood and potential impact/consequences of risks

Question 3

Inherent risk

Answer 3

Risk to an entity apart from any action to alter either the likelihood or impact of the risk

Question 4

Residual risk

Answer 4

Risk remaining after actions to alter the risk’s likelihood or impact

Question 5

Optimum risk

Answer 5

The level of risk that is within an organization’s risk appetite

Question 6

Income statement

Answer 6

The financial statement that reports an organization’s profit or loss for a specific period by comparing the revenues generated with the expenses incurred to produce those revenues

Question 7

Balance sheet

Answer 7

The financial statement that reports the assets, liabilities, and owners’ equity of an organization as of a specific date

Question 8

Statement of cash flows

Answer 8

The financial statement that summarizes the cash effects of an organization’s operating, investing, and financing activities during a specific period

Question 9

Hazard analysis

Answer 9

A method of analysis that identifies conditions that increase the frequency or severity of loss