Risk comes from not knowing what you’re doing. Let us insure your future!
What is risk?
Risk is a situation involving exposure to vulnerability that can be a cause losses. Risk is made of 2 parts: probability of something going wrong and negative consequences if it does. Analysing risk and taking appropriate action is therefore imperative for any business.
Risk analysis is a technique to identify and assess factors that may jeopardize the success of a project or achieving a goal. This technique also helps to define preventive measures to reduce the probability of these factors from occurring and identify countermeasures to successfully deal with these constraints when they develop to avert possible negative effects on the competitiveness of the company.
Risk Analysis helps you identify and manage potential problems that could undermine key business initiatives or projects. There are two steps to carrying out Risk Analysis - first identifying the possible threats that you might face, then estimating the likelihood that these threats will materialize. To do an in-depth analysis, you'll need to draw on detailed information such as project plans, financial data, security protocols, marketing forecasts, or other relevant information.
Risk analysis is useful in many situations, for example, when you're:- Planning projects, to help you anticipate and neutralize possible problems.
- Deciding whether or not to move forward with a project.
- Improving safety and managing potential risks in the workplace.
- Preparing for events such as equipment or technology failure, theft, staff sickness, or natural disasters.
- Planning for changes in your environment, such as new competitors coming into the market, or changes to government policy.
- Identification of Threats
- Human
- Operational
- Reputational
- Procedural
- Project
- Financial
- Technical
- Natural
- Political
- Structural
Process of Risk Analysis – Estimation and Management:
We at Asutosh and Pankaj cover risk perspective in process of carrying out internal audits. We also conduct risk analysis of the whole organization independently. These are the following steps to Risk analysis:
- Estimation of Risk
- Managing the Risk
- Review
Estimation of Risk
Once we've identified the threats faced by the Company, we need to work out both the likelihood of these threats being realized, and their possible impact. One way of doing this is to make Company’s best estimate of the probability of the event occurring, and then multiply this by the amount it will cost you to set things right if it occurs. This gives you a value for the risk
Managing the Risk
Once we've identified the value of the risks faced by the company, we start to look at ways of managing them. Once this is done, most importantly the company needs to choose cost-effective approaches - in many cases, there's no point in spending more on eliminating a risk than the cost incurred if the threat occurs. So, it may be better to accept the risk than for the company to use excessive resources to eliminate it. We advise to be sensible in how Company applies its limited resources, particularly if this involves ethical decisions or affects people's safety.
Review
This is the most important part – Review. Once we've carried out a Risk Analysis and have managed risks appropriately, it is of utmost importance that we conduct regular reviews. This is because the costs and impacts of some risks may change over the period of time and the risk factors might shift – some risks may become obsolete but new risks may appear. These reviews may involve re-doing your Risk Analysis, as well as testing systems and planning further steps appropriately.
We believe in protecting your best interest at heart.