What term is used to describe the risk that remains after risk controls have been implemented?

The term that describes the risk that remains after risk controls have been implemented is known as residual risk. This is an important concept in risk management because it reflects the level of risk that persists despite the measures taken to mitigate it.

After organizations identify potential risks and apply various controls, whether they are preventative, detective, or corrective, some level of risk will inevitably remain. This residual risk must be recognized and managed, as it can impact strategic objectives and overall risk exposure.

Understanding residual risk is crucial for effective risk management because it helps organizations assess the adequacy of their risk control measures and the need for further action. It also plays a key role in determining the organization's risk appetite and informing decision-making processes regarding risk acceptance or additional mitigation efforts.

Inherent risk, on the other hand, refers to the level of risk that exists in a process or activity before controls are applied, while controlled risk would imply a risk that has already been managed or mitigated. Evaluated risk indicates the process of assessing risks but does not specifically address the concept of remaining risk after mitigation efforts.