Definition of "Risk Assessment"What is Risk Assessment?
Every entity faces a variety of risks from external and internal sources that must be assessed. Risk assessment is the identification and analysis of relevant risks and their impact on the achievement of the company’s objectives. Management must form a basis for determining how risk should be managed. Because economic, industry, regulatory, and operating conditions will continue to change, management will need to employ mechanisms that enable management to identify and address the special risks that result from such change.