IDENTIFICATION AND SOURCES OF RISKS

IDENTIFICATION AND SOURCES OF RISKS

• Risk identification is the action or process of identifying some potential internal or external event, or threat or vulnerability or a fact that could cause damage to the entity or prevent it from achieving its objectives.
•  It includes documenting the potential risks in the form of a risk questionnaire or risk register and communicating the risks to the executive management. 
• Risk identification is the initial step in the process of risk management. 
• Risk identification is effective when the risk management team understands the business, industry or sector in which the business operates and the key management objectives or key performance indicators. Imaginative thinking and use of what can go wrong pointers forms the essence of a robust risk identification exercise.
•  Risk identification can be approached by a Top down exercise from the senior level to the junior level or vice versa, however, experience suggests that Top down exercises work more effectively and provide better outcomes to the businesses. 

Identification of risks is the process of determining which risks may affect the business/project and documenting their characteristics. Participants in the Identification process will usually include:-

•  Business managers 
•  Project team 
•  Risk management team 
•  Subject matter experts 
•  Customers 
•  End users 
•  Other project managers, stakeholders, and 
•  Outside experts