What does risk assessment primarily involve?

Risk assessment is a comprehensive process that not only involves identifying potential risks but also evaluating their impact and likelihood. This dual focus allows organizations to understand not just what risks exist, but also how significant those risks are and the probability of their occurrence. By assessing both the potential impact and likelihood, organizations can prioritize their resources and strategies effectively, addressing the most critical risks that could affect their operations.

Identifying risk alone is a crucial first step, but without evaluating how likely these risks are to materialize and the consequences they would cause if they did, a complete risk assessment cannot be achieved. Similarly, implementing changes is often a response to the findings from a risk assessment rather than part of the risk assessment process itself. Evaluating consequences alone, while important, does not encompass the necessary analysis of likelihood, which is essential for a thorough understanding of risk exposure.