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Summary Introduction to Risk identification, assessment, analysis and evaluation and risk and reporting finance, accounting and risk management$10.46
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Risk identification, assessment, analysis and evaluation and risk and reporting finance,
accounting and risk management
Unit 1
Identifying Risk
First 4 method are relatively straight forward methods, whereas the final four are analytical
approaches which use logic structuring methods to make risk identification less prone to
human error.
1) Expert thinking – relies on the expertise and experience of individuals / groups
within the organisation.
2) Focus groups and surveys – usually cross – department / cross – function allowing for
shared expertise to explore the potential risks and come to a consensus. Surveys can
be used to the same end goal where it is not possible to bring everyone together.
3) Checklists – used to support other methods such as expert judgement or focus group
to ensure particular types of risk events aren’t forgotten.
4) Physical inspections – common way to assess health and safety related risks or other
physical risks around the workplace including risks relating to fire.
5) SWIFT – primarily used to identify health and safety and environmental risks in
chemical processing and manufacturing industries. It includes a number of
structured what-if and how-could questions and is supported by a number of
checklists. It is incredibly time consuming but very thorough which is why it is used in
the aforementioned industries.
6) Delphi technique – uses a number of anonymous experts to assess the same issue /
process / activity etc in order to reach a consensus on the identification of risk
events. It requires a facilitator to manage the anonymous experts who are required
to complete questionnaires which are circulated to the other experts for further
comment. Again it is time consuming as consensus is often hard to reach but it is
very effect at identifying risk.
7) Root cause analysis – focuses on investigating the root causes of risk events. Can be
used with hypothetical or actual risk events.
based on 4 principles: (1) identify the causes of the event (2) establish the timeline
from normal operations to a risk event (3) distinguish between root causes and more
immediate causes and; (4) use the results to improve controls and to help manage
future risk events.
It is time consuming so best to identify causes of large and negative risk events.
8) System and process mapping – many organisations have these and where they do
fault three analysis of the process can be used to identify potential system or process
failures. Once identified, it is possible to track back to find possible causes of the
failure. In this way, it can be useful in identifying connected risk events but is
expensive and takes a lot of time if the mapping has not already been carried out by
the organisation.
Emergying risks
- PEST Analysis
PEST stands for Political / Economical / Social / Technological
A PEST analysis is usually completed by a group of individials supported by a
facilitator. An analysis of each of the factors above is undertaken usually using the
Delphi technique.
- SWOT Analysis
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