RM FINALS 4- 5 Flashcards
(118 cards)
The overall process of risk identification, risk analysis and risk evaluation.
Risk Assessment
It should be conducted ______, ____, and _____, drawing on the knowledge and views of stakeholders, and should use the best available information.
systematically
iteratively
collaboratively
The purpose of risk assessment is to identify the _____ that could impact the corporate objectives, stakeholder expectations, core processes and key dependencies.
significant risks
The purpose of ______ is to find, recognize and describe risks that might help or prevent an organization in achieving its objectives.
risk identification
Relevant, appropriate and up-to-date information is important in identifying risks.
The organization should identify risks, whether or not their sources are under its control
Give 11 Factors to Consider in Risk Identification
Tangible and intangible sources of risks
Causes and events
Threats and opportunities
Vulnerabilities and capabilities
Changes in the external and internal context
Indicators of emerging risks
The nature and value of assets and resources
Consequences and their impact on objectives
Limitations of knowledge and reliability of information
Time-related factors Biases
The purpose of ______ is to comprehend the nature of risk and its characteristics including, the level of risk.
risk analysis
Note:
■ Analysis techniques can be qualitative, quantitative or a combination of these, depending on the circumstances and intended use.
- _______ involves a detailed consideration of uncertainties, risk sources, consequences, likelihood, events, scenarios, controls and their effectiveness and can be undertaken with varying degrees of detail and complexity, depending on the purpose of the analysis, the availability and reliability of information, and the resources available.
Risk analysis
■ Risk analysis provides an input to ______ , to decisions on whether risk needs to be treated and how, and on the most appropriate risk treatment strategy and methods
risk evaluation
Factors to consider in Risk Analysis
■ The likelihood of events and consequences
■ The nature and magnitude of consequences
■ Complexity and connectivity
■ Time-related factors and volatility
■ The effectiveness of existing controls
■ Sensitivity and confidence levels
- The purpose of _______ is to support decisions.
- It involves comparing the results of the risk analysis with the established risk criteria to determine where additional action is required.
risk evaluation
Decisions after Risk Evaluation
– Do nothing Further
– Consider Risk Treatment options
– UNdertake further analysis to better understand the risk
– Maintain existing controls
– Reconsider objectives
______ recommend the assessment of inherent risk, while _____ states that risk assessment should be undertaken at inherent and at residual level.
– Internal auditors
– ISO31000
Note:
The benefit of undertaking assessment of inherent risk is that the difference between the current (residual) level and the inherent level can be identified.
______ is only useful if the conclusions of the assessment are used to inform decisions and/or to identify the appropriate risk responses for the type of risk under consideration.
Risk assessment
One of the approaches to Risk Assessment
■ When risk assessment is being undertaken by the Board of Directors, the Chief Executive Officer (CEO) and the other top-level management of an organization.
Top-down Risk Assessment
One of the approaches to Risk Assessment
When risk assessments are undertaken by involving individual members of staff and local department management.
Bottom up Risk Assessment
Read only:
Bottom Up Risk Assessment advantage and Disadvantage
Adv
– Buy in at all levels
– Ops awareness of local risks
– Varied Methodology
Dis Adv
– No focus on External or strat risks
–Time Consuming
– Too Detailed
Top Down Risk Assessment advantage and Disadvantage
Adv:
– Enterprise wide Approach
– Significant risks quickly identified
– “Buy-in” from top
Dis Adv:
– Too much Focus on External Risks
– No focus on Internal ops
– Too Superficial
risk Assessment Techniques
- _________
■ The use of structured questionnaires and checklists to collect information that will assist with the recognition of the significant risks. - ________
■ Collection and sharing of ideas at workshops to discuss the events that could impact the objectives, core processes or key dependencies. - _______
* Physical inspections of premises and activities and audits of compliance with established systems and procedures. - _____________
■ Analysis of the processes and operations within the organization to identify critical components that are key to success
1– Questionnaires and Checklists
2– Workshops and Brainstorming
3– Inspections and Audits
4– Flowcharts and Dependency Analysis
Risk Assessment Techniques
____________
■ An analysis of the strengths, weaknesses, opportunities, and threats faced by the organization.
■ It has the benefit that it also considers the upside of risk by evaluating opportunities in the external environment.
- One of its strengths is that it can be linked to STRATEGIC decisions.
SWOT ANALYSIS
Risk Assessment Techniques
_____________
* Considers the political, economic, social, technological, legal and ethical (or environmental) risks faced by the organization.
■ IT IS is a well-established structure with proven results for undertaking brainstorming sessions during risk assessment workshops.
PESTLE Analysis
Risk Assessment Techniques
_________
* A structured approach that ensures that NO RISKS s are omitted. IT studies are often undertaken of hazardous chemical installations and complex transport structures, such as railways and nuclear power stations.
■ It can also be applied to the analysis of the safety of products.
■ It is a very analytical and time consuming.
HAZOP (hazard and Operability
Risk Assessment Techniques
__________
■ it is a process that is being used by reliability engineers to understand potential industrial hazards and PREVENT ACCIDENTS.
■in risk management, it is used to evaluate the severe consequences of failure, how likely it is for the failure to occur and the chance of detecting the failure before it happens.
FMEA (Failures Modes and Effect Analysis
NOTE:
■ A very analytical and time-consuming approach
- Problems and defects are expensive. Customers understandably place high expectations on manufacturers and service providers to deliver quality and reliability.
■ Often, faults in products and services are detected through extensive testing and predictive modeling in the later stages of development. However, finding a problem at this point in the cycle can add significant cost and delays to schedules. The challenge is to design in quality and reliability at the beginning of the process and ensure that defects never arise in the first place.
Risk Assessment Techniques
__________
■ The first stage is to put the risk description into the middle box.
■ The causes of the risk then need to be recorded along with the preventive controls to stop the risk occurring and these are placed on the left side of the tie.
■ The impact of the risk and the identified response controls to lessen the impact of the risk are then placed on the right side of the tie.
bow tie analysis
Source - Preventive controls
Impact - Response Contols
______ is a qualitative and systematic tool, usually created within a spreadsheet, to help practitioners anticipate what might go wrong with a product or process.
■ In addition to identifying how a product or process might fail and the effects of that failure, It also helps find the possible causes of failures and the likelihood of failures being detected before occurrence.
- It is one of the best ways of analyzing potential reliability problems early in the development cycle, making it easier for manufacturers to take quick action and mitigate failure. The ability to anticipate issues early allows practitioners to design out failures and design in reliable, safe and customer-pleasing features.
■FMEA
