Which term describes the risk that remains after all controlled measures have been implemented?

Which term describes the risk that remains after all controlled measures have been implemented?

• A. Inherent risk
• B. Residual risk
• C. Acceptable risk
• D. Controllable risk

Answer: (B)

The term that describes the risk that remains after all control measures have been implemented is residual risk. This concept is vital in risk management as it acknowledges that no matter how effective the controls are, some level of risk will likely persist. Residual risk is the risk that an organization continues to face despite implementing various risk mitigation strategies and controls. Identifying and understanding this risk is crucial for organizations, as it allows them to assess whether they are comfortable accepting this risk level or if further measures are necessary. It also informs decisions about risk appetite and tolerance, which are important for effective risk governance. In contrast, inherent risk refers to the level of risk that exists in the absence of any controls. Acceptable risk defines the level of risk that an organization is willing to accept as part of its operations. Controllable risk indicates risks that can be effectively managed through various means. These concepts serve distinct purposes in risk management, but it is the notion of residual risk that focuses specifically on what remains after mitigation efforts have been applied.

The term that describes the risk that remains after all control measures have been implemented is residual risk. This concept is vital in risk management as it acknowledges that no matter how effective the controls are, some level of risk will likely persist.

Residual risk is the risk that an organization continues to face despite implementing various risk mitigation strategies and controls. Identifying and understanding this risk is crucial for organizations, as it allows them to assess whether they are comfortable accepting this risk level or if further measures are necessary. It also informs decisions about risk appetite and tolerance, which are important for effective risk governance.

In contrast, inherent risk refers to the level of risk that exists in the absence of any controls. Acceptable risk defines the level of risk that an organization is willing to accept as part of its operations. Controllable risk indicates risks that can be effectively managed through various means. These concepts serve distinct purposes in risk management, but it is the notion of residual risk that focuses specifically on what remains after mitigation efforts have been applied.