Question

1. In the risk identification process, those involved should recognize that it is a misperception to think of a risk as a sudden event." Identifying an issue that is facing the organization and discussing it in advance can potentially lead to the risk being mitigated. Before considering some of the specific techniques available for organizations to identify risks, several important factors should be noted about this process; identify and explained the five (5) factors. (25 marks) 2. Risk management (RM) takes a broad perspective on identifying the risks that could cause an organization to fail to meet its strategies and objectives. Many organizations do follow risk management but hardly ever do we get to see an organization following defined techniques to identify risks. There are many techniques to identify risks of which few common methods are listed in this article which can be followed within any company. These methods of analysis help those that practice risk management to use established ways of identifying risk. It also helps them manage risk by either avoiding it, transferring it, reducing the impact of the risk, or by various other alternative solutions. Classify some techniques for identifying risk, at least five (5) methods. ( 25 marks)

it's Risk management subject

Answer 1

1. Before considering techniques to identify risks, certain important factors need to be noted. They are:

i. Convenience-The risk assessment method must be convenient to apply. Else, it may affect the normal operation of the business.

ii. Cost-The expenses incurred in applying the new technique must not severely affect the profitability of the concern. Further, it would defeat the very purpose of using the method.

iii. Acceptability-The technique adopted must be acceptable to everyone connected with the venture , starting from board members to employees, auditors, and various other stakeholders.

iv. Simple use-The The techniques must facilitate effortless use. Otherwise, it will become a burden on the management.

v.Unbiased-The techniques must produce an unbiased result, giving equal importance to all the factors in consideration.

2. Some of the techniques for identifying risk are:

i. One-to-one interviews-Market players, employees, stakeholders, customers and even competitors can be interviewed to understand various possible business risks from their point of view. Experienced business persons can give better omens of upcoming risks.

ii.Delphi method-In this method, a panel of experts are interrogated by a series of questionnaires. Each information is thoroughly discussed and a final conclusion is made through mutual consent. The experts will together identify all possible risks.

iii.SWOT analysis-It analyses various strengths, weaknesses, opportunities, and threats of the business, and with the information obtained, they will identify the risks of the business.

iv. Material research-Various case studies and risk-related articles, documents and other materials are rigorously read and studied to gain insight about the possible upcoming risks of the business.

v.Advisory services- Expert advisory services can be taken for identifying risks.