What does risk treatment involve?

What does risk treatment involve?

• A. Ignoring risk
• B. Implementing actions to reduce, transfer, accept, or exploit risk
• C. Only reporting risk to regulators
• D. Eliminating all risks

Answer: (B)

Risk treatment is about deciding and putting in place actions to modify the level of risk you’re exposed to. After you’ve identified and assessed risks, you don’t just ignore them or try to remove every risk. You choose among options that actually change the exposure: reduce the likelihood or impact through controls and processes; transfer the risk to someone else (for example, through insurance or outsourcing); accept the risk when the cost of further action isn’t justified or the residual level is within your appetite; or exploit opportunities by taking actions that turn positive risk into a benefit. This framework helps ensure the residual risk aligns with the organization’s risk appetite and cost–benefit considerations.

Risk treatment is about deciding and putting in place actions to modify the level of risk you’re exposed to. After you’ve identified and assessed risks, you don’t just ignore them or try to remove every risk. You choose among options that actually change the exposure: reduce the likelihood or impact through controls and processes; transfer the risk to someone else (for example, through insurance or outsourcing); accept the risk when the cost of further action isn’t justified or the residual level is within your appetite; or exploit opportunities by taking actions that turn positive risk into a benefit. This framework helps ensure the residual risk aligns with the organization’s risk appetite and cost–benefit considerations.