Which of the following tools is commonly used for risk assessment in ORM?

Scenario analysis is a widely recognized tool used for risk assessment in Operational Risk Management. It involves evaluating potential future events by considering different scenarios that could negatively impact an organization. This method allows organizations to identify, analyze, and prepare for various operational risks by simulating adverse situations and assessing their potential impact.

The strength of scenario analysis lies in its ability to help risk managers think critically about unlikely but high-impact events, often referred to as "black swan" events. By visualizing these scenarios, organizations can develop proactive strategies and controls to mitigate potential operational risks, ensuring they are better prepared for uncertain situations.

Financial audits, market surveys, and employee evaluations, while valuable in their own contexts, do not specifically focus on the predictive assessment of operational risk scenarios. Financial audits are typically retrospective, assessing historical financial data, while market surveys gather external data about market trends and perceptions. Employee evaluations are focused on performance assessments rather than risk identification or assessment characterizing operational risks. This is why scenario analysis is the preferred tool for risk assessment within the ORM framework.