“If you tell the truth, you don’t have to remember anything.”
—Mark Twain
Risk can be defined in various ways, depending on the context. Generally, risk is considered as the possibility of damage, loss or injury; it’s a threat of something potentially going wrong with the activities or organization of the entity or persons concerned. Without a potential adverse consequence occurring, there is no hazard. Audits are one tool of risk assessment.
Risk assessment is the process, identification, analysis and estimation of potential relative adverse hazards, and whether it relates to general financial decisions or environmental, ecological, public or human health risk—and what could happen if a hazard occurs. This is generally done using either or both a quantitative or qualitative risk analysis tools.
Quantitative risk analysis is all about the numbers. The available data is numerical value, structured and statistical, and is used to predict the probability (and acceptability) of a risk event outcome. Risks are scored based on their probability or likelihood of occurring and the impact, should they occur. High-quality data is needed to…
