Risk Identification & Evaluation Flashcards

Which of the following best describes risk identification?

Answer: Determining potential events that may impact objectives.

Risk identification best describes the process of determining potential events or circumstances that may impact an organization's objectives. It involves systematically discovering, recognizing, and describing these potential events, whether positive or negative. This foundational step lays the groundwork for all subsequent risk analysis and treatment activities.

What is a risk register used for?

Answer: To track and document identified risks.

A risk register is a central repository used to systematically track and document all identified risks within an organization or project. It typically includes details such as risk descriptions, likelihood, impact, mitigation strategies, owners, and current status. This tool provides a comprehensive overview of the risk landscape, enabling effective management and communication.

Which technique is commonly used during the risk identification phase?

Answer: Brainstorming.

Brainstorming is a commonly used and highly effective technique during the risk identification phase. It involves a group of stakeholders collaboratively generating a comprehensive list of potential risks, encouraging creative thinking and diverse perspectives. This method helps uncover a wide range of threats and opportunities that might impact objectives.

What is the primary goal of risk evaluation?

Answer: To prioritize risks based on impact and likelihood.

The primary goal of risk evaluation is to prioritize risks based on their potential impact and likelihood of occurrence. This assessment allows organizations to determine the significance of identified risks, enabling them to allocate resources effectively to the most critical areas. It informs decision-making regarding which risks require immediate attention and treatment.

In risk evaluation, what does 'likelihood' refer to?

Answer: The probability that a risk event will occur.

In risk evaluation, 'likelihood' refers to the probability or frequency with which a specific risk event is expected to occur. It assesses how often a threat might materialize, often expressed qualitatively (e.g., rare, likely) or quantitatively (e.g., a percentage). Understanding likelihood is crucial for assessing the overall significance of a risk.

What is a 'low likelihood, high impact' risk typically considered?

Answer: A strategic risk.

A 'low likelihood, high impact' risk is typically considered a strategic risk. While these events may not happen often, their occurrence could have severe, far-reaching consequences for an organization's long-term goals, reputation, or even survival. Such risks require careful planning and contingency strategies despite their low probability.

Which tool helps visualize the probability and impact of risks?

Answer: Risk matrix.

A risk matrix is a visual tool that helps visualize the probability (likelihood) and impact (severity) of risks. It typically uses a grid with axes representing these two factors, allowing organizations to quickly plot and prioritize risks into categories like low, medium, or high. This provides a clear, intuitive overview of the risk landscape.

Which source is typically used to identify risks?

Answer: Past project records.

Past project records, including lessons learned, incident reports, and historical data, are invaluable sources for identifying potential risks. By reviewing previous experiences, organizations can anticipate similar challenges, understand common pitfalls, and leverage insights to proactively identify and mitigate risks in current or future endeavors. This historical perspective provides empirical evidence for risk identification.

What role does documentation play in risk identification?

Answer: It ensures risks are recorded and traceable.

Documentation in risk identification is crucial for creating a formal, written record of all identified risks. This record ensures that risks are consistently tracked, monitored, and managed throughout their lifecycle. It also provides a clear audit trail, facilitating accountability and enabling future analysis and learning from past risk events.