Risk Assessment Report: Understanding the Process and Benefits of Risk Management

Risk assessment reports are a crucial tool for organizations to identify and mitigate potential risks. A risk assessment report helps organizations understand the likelihood and potential impact of a risk.

The risk assessment process involves identifying, analyzing, and evaluating potential risks. This process helps organizations prioritize risks and develop effective mitigation strategies.

Effective risk management can lead to significant benefits, including reduced costs, improved efficiency, and enhanced reputation. By identifying and mitigating potential risks, organizations can minimize the likelihood of unexpected events.

A well-structured risk assessment report provides a clear and concise overview of an organization's risk landscape. This helps stakeholders understand the organization's risk profile and make informed decisions.

Risk assessment is a systematic process used to identify, evaluate, and prioritize potential risks to a project, organization, or individual. It involves analyzing the likelihood and potential impact of each risk to determine its overall risk score.

A risk assessment typically starts by identifying potential risks, which can be categorized into different types such as financial, operational, and reputational risks. By understanding the types of risks involved, organizations can develop strategies to mitigate or manage them effectively.

Risk assessment involves evaluating the likelihood of a risk occurring and its potential impact if it does happen. This is often done using a risk matrix, which plots the likelihood of a risk against its potential impact to determine its overall risk score.

The goal of a risk assessment is to identify and prioritize risks, allowing organizations to allocate resources effectively to mitigate or manage them. By doing so, organizations can reduce the likelihood of risks occurring and minimize their potential impact.

To create a risk assessment, start by populating your risk matrix with risks and issues by selecting the Consequence and Probability fields and assigning values. You can add any issue type as long as you select these two fields.

You can use the BigPicture's Risk board in two ways: by adding individual project tasks to the risk matrix or by adding risks directly to the matrix. This allows you to use the project tasks at risk approach, where you can add a task like "Road building task" to the risk matrix and situate it according to the risk's probability and impact.

Document all identified risk scenarios, including details of the risk scenario, date of identification, existing security controls, the risk level, plan for mitigating the risk, current progress, and the residual risk expected after mitigation. This information should be reviewed and updated regularly to provide visibility of the current risk portfolio.

Creating a risk assessment template is a crucial step in identifying and mitigating potential risks in your project. You can create a risk matrix for your project in just a few steps.

A risk matrix is a useful tool for project planning that can help you visualize and prioritize risks. It's not a one-time task, but rather an ongoing process that requires regular updates and assessments.

You can create a separate matrix for an entire organization, a specific program, or a project. In each case, it could be different. Therefore, there are a few important things about risk assessment matrices to note.

When defining your matrix, think about the number of intervals for the likelihood and impact. How many rows and columns will it have? For example, a 3×3 or 3×4 matrix could suit your project better.

You can also customize your risk matrix to fit your project's specific needs. You can transpose the whole matrix and/or invert individual scales, change the scale names, and add or delete values.

Here are some key considerations to keep in mind when creating your risk matrix:

Your scale will not always be linear. You may observe it with risks that carry high impact—those will often have larger intervals than low-impact risks. Take a look at the table above, and compare the interval for the “Low” impact (0-3%) and the “Catastrophic” impact (50-100%). The discrepancy is quite significant—the impact of a fatal injury will be much greater than that of a scratched finger.

The labels in brackets on matrix scales are arbitrary. You can name your values however you want. For example, Impact (1) could have a label: “Insignificant.”

To populate your risk assessment with issues, start by identifying the risks and issues that need to be addressed. You can add any issue type to your risk matrix as long as you select the Consequence and Probability fields and assign them respective values.

Your Jira admin will need to preconfigure the fields you can add to your tasks, so be sure to check with them before getting started. Add the Consequence and Probability fields to your new or existing tasks to make them pop up on your risk matrix.

You can add new and existing tasks and tasks as risks directly on the risk matrix by clicking on any quadrant. Click "Create new Jira issue" and provide details for your risk, remembering to include the Probability and Consequence fields.

Documenting all risks is crucial, so be sure to include details of the risk scenario, date of identification, existing security controls, the risk level, plan for mitigating the risk, current progress, and the residual risk expected after mitigation.

The risk assessment process involves breaking down complex risks into manageable parts. This is especially useful when dealing with large-scale projects like the "Road building task" example, where you can add tasks to a risk matrix to assess their probability and impact.

The NIST risk assessment process, outlined in Special Publication (SP) 800-30, is a formalized approach to identifying and assessing potential hazards. It's a step-by-step guide that helps organizations prioritize threat responses and measure progress over time.

The process consists of four primary phases: preparing for the assessment, conducting the assessment, communicating the assessment results, and maintaining the assessment. By following these phases, organizations can ensure a thorough and effective risk assessment.

The tasks approach to risk assessment is a practical way to identify and manage risks in a project. You can add individual project tasks to the risk matrix, which is a more popular approach among BigPicture users.

This approach allows you to situate the task on the matrix according to the risk's probability and impact, even if you don't know the specific risk it's related to. For example, you can add a "Road building task" to the risk matrix.

You can also add tasks as risks to the risk matrix, which will show you the risk itself, such as the risk of "Water leakage". However, this approach may not readily show you which tasks a given risk relates to.

To connect a task to a specific risk, you can use Jira Issue Links. This way, you can see the relationship between the task and the risk, and also add information about the risk to the issue, such as a comment or an attachment.

Threat sources can come from anywhere, and it's essential to identify them to assess the risks to your organization. A threat is any event that can cause damage to your assets or processes.

Some threat sources are adversarial, like hackers, malware, and third-party vendors. Others are environmental, such as natural disasters like floods, hurricanes, and earthquakes. You can lose your data and servers in a natural disaster, so consider the potential impacts when deciding between on-premise and cloud-based servers.

Human error is also a significant threat source. A data center without physical access control is vulnerable to physical intrusion, while a server without malware protection is vulnerable to cyber threats. You can also score adversarial threats against their Capability, Intent, and Targeting potential, and non-adversarial threats against the range of effects.

For example, a system in a hot climate without proper climate controls can become overheated, while a knowledgeable disgruntled employee can deal a worse blow than an external attacker. A Big Gulp precariously placed near a server is not a threat, but a system failure or human error can be.

Here's a breakdown of some common threat sources:

Each threat source should be given a unique identifier and scored against its potential impact. By understanding the threat sources that affect your organization, you can develop a comprehensive risk assessment plan to mitigate these threats.

When managing a project, it's essential to consider the various types of risks that can impact its success.

New elements in a project can be a significant indicator of potential risks. For instance, introducing a new supplier for safety goggles or hiring a new software developer can bring unknown risks.

Cost risks are a major concern in project management. This type of risk can occur when there's a new supplier involved, as seen in the example of safety goggles.

Schedule risks can also be a challenge, especially when introducing new processes or technologies that require a learning curve.

Performance risks can arise from a variety of factors, including the introduction of new software or technologies.

Operational risks can occur when there's a change in how employees carry out their work, such as new processes.

Market risks are also a consideration, especially when there's a new software developer involved.

Governance risks can be a concern when introducing new technologies or processes.

Strategic risks can occur when there's a change in how the project is managed or executed.

Legal risks can arise from a variety of factors, including the introduction of new technologies or software.

Environmental risks can occur when there's a change in how the project is executed, such as the use of new materials.

Here are the 9 types of risks in project management:

A NIST risk assessment is a formalized process that helps entities prepare for potential hazards and their consequences. It's a way to identify and assess risks that could affect an individual, group, organization, or nation.

The NIST risk assessment process is guided by Special Publication (SP) 800-30, which outlines a methodology for identifying and assessing Information Technology (IT) risks. This publication helps organizations digest complex threats and vulnerabilities into measurable values.

The four phases of a NIST risk assessment are: preparing for the assessment, conducting the assessment, communicating the assessment results, and maintaining the assessment.

A threat is any event that can cause damage to an organization's assets or processes. Threats can be internal or external, malicious or accidental. A vulnerability is a flaw that exposes a company to potential threats.

To identify threats, consider both adversarial and non-adversarial sources. Adversarial threats include hackers, malware, and other IT security risks, while non-adversarial threats include natural disasters, system failure, human error, and physical vulnerabilities.

Some common threats that affect every organization include unauthorized access, misuse of information, data leaks, loss of data, and service disruption.

When identifying vulnerabilities, look for weaknesses that a threat can exploit to breach security, harm your organization, or steal sensitive data. Vulnerabilities can be found through vulnerability analysis, audit reports, and software security analysis.

Here are some examples of vulnerabilities to consider:

To assess the impact of threats and vulnerabilities, you'll need to score them against their Capability, Intent, and Targeting potential, as well as the range of effects that would come from them.

Risk Assessment Analysis is a crucial step in identifying and evaluating potential risks to your organization. This involves analyzing the likelihood and impact of various scenarios on a per-year basis.

To determine the likelihood of a risk, consider factors such as the ease of exploitability and reproducibility of threats. For example, a one in fifty-year occurrence of a data breach could result in an estimated loss of $1 million yearly.

The potential impact of a risk can be significant, affecting not just your organization, but also the nation as a whole. Consider the repercussions of a threat event, including financial cost, legal action, strained relationships, and tarnished reputation.

Here's a summary of the factors to consider when analyzing risks:

By considering these factors, you can determine the magnitude of impact and score each anticipated impact using the guidance in Appendix H of NIST SP 800-30. This will help you develop an effective risk assessment report that identifies and prioritizes potential risks to your organization.

In 2025, tracking the right metrics and KPIs is crucial for effective risk assessment analysis. Here are 14 key metrics and KPIs to focus on:

1. Risk Exposure: This measures the likelihood and potential impact of a risk event occurring, which can be calculated using the risk matrix.

2. Return on Investment (ROI): This is a key metric for evaluating the financial performance of risk management initiatives, with an average ROI of 20% in the industry.

3. Risk-Adjusted Return on Capital (RAROC): This metric takes into account the risk exposure of an investment, with a target RAROC of 15% for most companies.

4. Operational Risk: This type of risk is often measured using the Basel II framework, which considers factors such as internal controls and external events.

5. Credit Risk: This is typically measured using the credit scoring model, which assesses the likelihood of a borrower defaulting on a loan.

6. Market Risk: This type of risk is often measured using the Value-at-Risk (VaR) model, which estimates the potential loss of a portfolio over a specific time horizon.

7. Regulatory Capital: This is a key metric for evaluating a company's compliance with regulatory requirements, with an average regulatory capital ratio of 10% in the industry.

8. Risk Management Cost: This measures the costs associated with implementing and maintaining risk management initiatives, which can range from 1% to 5% of total revenue.

9. Risk-Related Accidents: This metric tracks the number of accidents or incidents that occur due to risk-related factors, with an average of 5 incidents per 100 employees.

10. Compliance Rate: This measures the percentage of employees who comply with risk management policies and procedures, with an average compliance rate of 85% in the industry.

11. Employee Training Hours: This metric tracks the number of hours employees spend on risk management training, with an average of 10 hours per employee per year.

12. Risk-Related Insurance Claims: This metric tracks the number of insurance claims made due to risk-related factors, with an average of 2 claims per 100 employees.

13. Business Continuity Plan (BCP) Effectiveness: This measures the effectiveness of a company's BCP in minimizing downtime and data loss, with an average BCP effectiveness rate of 90%.

14. Customer Satisfaction: This metric tracks the level of customer satisfaction with risk management initiatives, with an average customer satisfaction rate of 80% in the industry.

To determine the likelihood and impact of various scenarios on a per-year basis, we need to consider how likely these cyber risks are to occur and their impact if they happen. This involves identifying the probability of a risk event and its potential consequences.

The likelihood of a risk event can be expressed on a 5×5 matrix, with levels ranging from 1 (very unlikely) to 5 (very likely). For example, if you estimate that a breach of your company's database is unlikely to occur, you might score it as a 2 (not likely).

To estimate the impact of a risk event, consider the potential consequences, such as financial loss, reputational damage, or disruption to business operations. For instance, if a breach of your database exposes sensitive information valued at $100 million, and you estimate that at least half of the data would be exposed before it could be contained, resulting in an estimated loss of $50 million, you would need to consider the likelihood of this scenario occurring.

Here's a table to help you score the likelihood and impact of a risk event:

By considering the likelihood and impact of various scenarios, you can develop a more accurate understanding of the potential risks facing your organization and make informed decisions about how to mitigate them.

The likelihood of a risk event can also be determined by considering factors such as the discoverability of the security weakness, ease of exploitability, reproducibility of threats, prevalence of the threat in the industry, and historical security incidents. For example, if a highly-publicized vulnerability on popular mobile devices is readily exploitable, you might score it as a 5 (very likely).

Remember to consider the potential consequences of a risk event, including financial loss, reputational damage, or disruption to business operations. For instance, if a breach of your database exposes sensitive information, you would need to consider the potential financial loss and reputational damage.

Ultimately, the goal of scenario likelihood and impact analysis is to develop a more accurate understanding of the potential risks facing your organization and make informed decisions about how to mitigate them. By considering the likelihood and impact of various scenarios, you can prioritize your risk mitigation efforts and allocate resources effectively.

Risk Assessment Prioritization is a crucial step in identifying and addressing potential security threats. It involves evaluating and categorizing risks based on their likelihood and potential impact.

To prioritize risks, a risk matrix can be used to classify each risk scenario. This matrix helps determine which risks require immediate attention and which can be addressed later.

A risk matrix can be used to classify risks into three categories: avoid, transfer, or mitigate. If a risk is low and not worth mitigating, it's best to take no action. If a risk is significant but difficult to address, it's possible to share the responsibility by transferring it to a third party, such as through cyber insurance or outsourcing security services.

Risks that are significant and within the operational scope of the internal team should be mitigated. This can be done by deploying security controls and other measures to reduce their occurrence and potential impact.

Here's an example of a risk matrix that can be used to classify risks:

A risk assessment program must recognize that there is a certain level of residual risk that will be missed, or will not be fully addressed. This must be formally accepted by senior stakeholders as part of an organization's cybersecurity strategy.