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Risk Identification: Key Examples and Methods

This document provides examples of good and bad risk descriptions, and outlines steps for a risk identification process. It suggests identifying an institution's objectives, stakeholders, value creation activities, and critical processes. Potential risk sources and changes are listed, such as accidents, crime, economic variance, and technology failures. Management should consider interconnections between identified risks.

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tolosa.andres
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36 views4 pages

Risk Identification: Key Examples and Methods

This document provides examples of good and bad risk descriptions, and outlines steps for a risk identification process. It suggests identifying an institution's objectives, stakeholders, value creation activities, and critical processes. Potential risk sources and changes are listed, such as accidents, crime, economic variance, and technology failures. Management should consider interconnections between identified risks.

Uploaded by

tolosa.andres
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Risk Identification examples:

One can see from the following examples that failure to correctly define your risk will affect control identification, mitigation plan and
ultimately reporting. "Garbage in garbage out" analogy. Below, we have provided some examples of "good" and "bad" risk
descriptions: (Adapted: AUS/NZ Standard 2004)
Issues to Consider in the Risk Identification Process,

1. What are the main objectives of our institution?

What are our strategic objectives? What are our business objectives?
What are our financial targets? What are our service delivery targets?
What are our other key targets?

2. Who are our stakeholders and how can they pose a risk to us and how can we pose a risk to them?

Customers Communities
Suppliers Creditors
Employees

3. How do we create value for stakeholders?

Service delivery Financial sustainability


Reputation Compliance
Administration

4. What are the critical success factors

Core skills IT systems


Cost containment Budgeting
Staff retention

5. What are the institution's critical processes?

Procurement Processing payments


Distribution Information management
Administration
6. What are the potential sources of risk and change that could impact on the above?

Accidents Cash flow variances Civil unrest


Contract breach Crime Currency exchange rates
Distribution failures Economy variance Engineering failures
Environmental incidents Expense management Financial difficulties
Fire Fraud Human resources failures
Inflation Interest rate change Labour relations failure
Medical incidents Natural perils Negligence
Procurement failures Project failures Quality failures
Social change Strategy execution Technology failure

Once the initial risk identification process has been completed, management should already start considering whether any of the
risks are interconnected, i.e. is there any correlation between the identified risks?

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