Ingredients of Risk Assessments

Eventually most companies will be faced with some form of major loss, which is apart from normal business risks. Unless a contingency plan has been prepared the peril of escalation of the loss cannot be avoided. Before embarking on the preparation of a contingency plan or plans the potential risks must be evaluated and a full audit of the company's facilities undertaken. Some industries have a higher risk potential than others, some present special risks, some have to comply with legislative conditions.

To cover the whole spectrum of risks would involve detailed analysis of every industry and this Manual can only offer general guidelines that are common to most industries and businesses. Whether the evaluation is carried out as an "in house" exercise, or whether an outside consultant is employed, is a matter for debate. Whilst the "insider" has detailed knowledge of the particular company the "outsider" will probably identify risk areas overlooked by the "insider". Every mega project needs to have a beginning and also need to have feeling of security.?This need is more pronounced in the beginning. This is the time when security assessment has to be carried out which is a deciding factor for the type, quality and the size of security management.?As organization grows and industrialization takes place, complex security problems emerge increasingly and at certain time consideration must be given to beside either to have contractual security or develop and proprietary security complete with security gadgets, personnel recruitment staffing and development.

Risk assessment is the scientific foundation of risk analysis and has four components:

• Hazard Analysis: which includes identification and evaluation.
• Hazard Characterization: what the hazard actually is.
• Exposure Assessment: how much exposure the people and property has to the risk.
• Risk Characterization: the potential degree of risk.

How do we calculate risk?

Risk is calculated using the formula: hazard X exposure = risk.

The formula allows us to take hazard and exposure into consideration so we can determine risk. Once we've established risk, we can then identify the safe levels for consuming an ingredient.

The Risk Assessments conducted by security consultants typically involve a comprehensive analysis of potential risks and vulnerabilities within a system or environment, followed by the identification and implementation of appropriate safeguards to mitigate those risks. The specific ingredients or components of a risk assessment may vary depending on the scope and nature of the assessment, but generally include:

Scope and Objectives: A clear statement of the purpose, scope, and objectives of the risk assessment, including the systems or assets being assessed, the boundaries of the assessment, and the goals of the assessment.

Methodology: A description of the methodology used to conduct the risk assessment, including the approach, techniques, and tools used to identify, analyze, and evaluate risks.

Threats and Vulnerabilities: Identification and documentation of potential threats or hazards that may pose risks to the system or environment being assessed. This may include physical threats (e.g., unauthorized access, theft), technical threats (e.g., malware, hacking), personnel threats (e.g., insider threats), and environmental threats (e.g., natural disasters).

Assets at Risk: Identification and documentation of the assets or resources that are at risk, including physical assets (e.g., hardware, facilities), information assets (e.g., data, intellectual property), and human assets (e.g., personnel).

Risk Likelihood and Impact: An assessment of the likelihood and potential impact of each identified risk, typically expressed in terms of a risk matrix or risk rating system. This may involve assigning scores or ratings based on the severity of the risk and the likelihood of its occurrence.

Existing Controls: Documentation of existing controls or safeguards that are in place to mitigate identified risks, including technical controls (e.g., firewalls, encryption), physical controls (e.g., access controls, security cameras), procedural controls (e.g., policies, procedures), and personnel controls (e.g., training, awareness).

Risk Mitigation Recommendations: Recommendations for additional controls or safeguards that should be implemented to mitigate identified risks, including specific actions or measures to reduce the likelihood or impact of each risk. These recommendations should be practical, feasible, and aligned with the organization's risk tolerance and security objectives.

Risk Residuals: Documentation of residual risks that may remain after implementing recommended controls, and an assessment of the acceptable level of residual risk for the organization.

Documentation of Assumptions and Limitations: Any assumptions or limitations of the risk assessment, including constraints or factors that may affect the accuracy or completeness of the assessment, should be documented.

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Conclusion: A summary of the findings, conclusions, and overall risk posture of the system or environment being assessed, along with any recommendations for ongoing monitoring or review.

The format of the risk assessment report may vary depending on organizational requirements, but generally, it should be well-organized, clear, and concise, with appropriate use of tables, charts, and diagrams to illustrate findings and recommendations. It should also be written in a manner that is understandable to the intended audience, which may include technical and non-technical stakeholders. Proper documentation is critical to ensure that the risk assessment findings and recommendations are well-documented and can be used as a reference for future risk management activities.