Which term describes the potential effects of identified risks?

Risk evaluation is the process of determining the significance of identified risks and their potential impacts on an organization. This term encompasses analyzing the likelihood of each risk manifesting and the consequences it could have if it were to occur. In this context, risk evaluation helps prioritize risks based on their potential effects, guiding decision-makers in formulating appropriate strategies to manage or mitigate those risks.

By understanding the potential effects, organizations can allocate resources effectively to address high-priority risks while considering factors such as their likelihood and significance. This evaluation is critical for informed decision-making in risk management.

Meanwhile, risk analysis generally involves the initial identification and assessment of risks, while risk response refers to the strategies implemented to mitigate or manage those risks. Risk monitoring, on the other hand, focuses on tracking existing risks and changes in the risk landscape over time. Each of these aspects is essential for comprehensive risk management, but it is the risk evaluation that specifically describes the potential effects of identified risks.