Importance Of Risk Identification

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RISK IDENTIFICATION
Risk identification is a part of risk management process. Risk identification is the first step in risk management process. Risk management have a several definitions. Firstly, risk management can be define as the process to determining characteristics, duration period and possible outcomes of all possible risk events or hazard which can give a positive or negative effect or impact to business or other projects. Other than that, risk identification also can be defined as an action that taken to identify the risks that exposed to the business entity or other organizations.

OBJECTIVE OF RISK IDENTIFICATION
Risk identification has three main objectives, firstly is to monitor existing risk. Monitoring the existing risk is …show more content…

The first type is analysis of documents. A document is a drawn, presented, written or recorded representation of thoughts which represented in order to serve as evidence for some purpose. For the business entities, the documents that they can analyse in risk identification technique to identify the risk is financial statement for examples are such as balance sheet and income statement. This document can help the business entity to examine the potential risks that they are facing. Other documents that can help the business entity to identify the risk are such as insurance record and previous loss …show more content…

Questionnaire is a set of questions with answers to choice whether in printed or written that have a purposes to get information. The information collected can help risk manager or business entity to understand more about the risk or threats that they need to face.
Checklist is another technique that business entity or organization can use to identify the risks and threats that can bring negative effects to their business. Checklist is a list that includes many of items or things to be checked or done with small checkbox on other side. The lists can content the threats, perils or potential risks that exposed to the business entity. But, using this technique to identify risk has an advantages and disadvantages. The advantage using this tool is the cost of this technique is low meanwhile the disadvantage is the certain things or items in the checklist maybe no answered.
Next technique is site inspection. Site inspection also known as a personal visit. This tool can used to help business entity to identify the risk. For example, a risk manager can use this technique is to ensure that all technical and safety requirement of the building is followed to the regulations as a step to prevent the perils from

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