Risk assessment is a difficult task that some people conflate with risk management.

Risk assessment is a
dynamic process, which highlights the lack of awareness that some people have about it. For some, risk
assessment entails guessing how probable something awful will happen and, if it does, guessing what
the consequences will be. Some people do this simply to fulfill a request from someone else and cross it
off their "to-do" list.

Risk assessment is frequently carried out in an iterative manner. The procedure starts with the
identification of prospective dangers and the analysis of those items to determine what might happen if
the hazard occurs.

There are several undesirable occurrences that could occur, so the business should assess the numerous
risks to which it and its stakeholders are or may be exposed. The amount, location, timing, pace, and
persistence of the hazard can all lead to damage to the business, its stakeholders, and assets. Identifying
and quantifying the assets that are at risk is a key part of risk assessment.

While the word “asset” is usually associated with monetary resources, tangible goods (e.g., buildings,
vehicles, machinery, and inventory), reputation, and both employees’ and customers’ health and safety
are also of importance, because a poor reputation or injuries are a critical consideration of any risk
assessment. Damage to company IT is also a major worry, as these products normally require a
significant amount of resources to operate, and their failure to do so can create significant business
disruption. The occurrence of a risk event may have a detrimental impact on the organization's
connections with customers, suppliers, the local community, investors, and other stakeholders.