List the main steps in the risk management process.

List the main steps in the risk management process.

• A. Identify risks; assess likelihood and impact; determine risk responses; implement controls; monitor/report; review and adjust.
• B. Define budgets; audit; report to shareholders; terminate projects.
• C. Identify opportunities; forecast revenue; invest; divest.
• D. Design controls; test them; ignore monitoring; report once a year.

Answer: (A)

The main concept here is the lifecycle of risk management. It begins with identifying the risks that could affect objectives, then assessing each risk in terms of likelihood and potential impact to prioritize attention. After that, determine appropriate risk responses—whether to avoid, reduce, transfer, or accept the risk. Next, implement the chosen controls or actions to embed those responses in operations. Ongoing monitoring and reporting provide visibility into risk exposure and the effectiveness of controls. Finally, review and adjust the risk management approach as circumstances change, closing the loop and driving continuous improvement. The other options miss essential elements or include activities not part of risk management (for example, focusing solely on budgets and reporting, or ignoring monitoring).

The main concept here is the lifecycle of risk management. It begins with identifying the risks that could affect objectives, then assessing each risk in terms of likelihood and potential impact to prioritize attention. After that, determine appropriate risk responses—whether to avoid, reduce, transfer, or accept the risk. Next, implement the chosen controls or actions to embed those responses in operations. Ongoing monitoring and reporting provide visibility into risk exposure and the effectiveness of controls. Finally, review and adjust the risk management approach as circumstances change, closing the loop and driving continuous improvement. The other options miss essential elements or include activities not part of risk management (for example, focusing solely on budgets and reporting, or ignoring monitoring).