Chapter 4: Risk and Risk

Management

Jovit G. Cain, CPA

 Risk
“Risk is the uncertainty of outcome within a range
of exposures arising from a combination of the
impact and probability of potential events.
The uncertainty of an event occurring that could
have an impact on the achievement of
objectives.
 Risk Management
- Is a dynamic process for taking all reasonable
steps to find out and deal with risks that impact
objectives. It is the response to risk and
decisions made in respect of available choices
and resources.
- It is the task of defining risk, identifying risks,
assessing this risks for impact and materiality
and then devising suitable ways for dealing
with more significant risks.
 BENEFITS
 More realistic business and project planning.
 Actions implemented in time to be effective.
 Greater certainty of achieving business goals and project
objectives.
 Appreciation of, and readiness to exploit, all beneficial
opportunities.
 Improved loss control
 Improved control of project and business costs
 Increased flexibility as a result of understanding all options
and associated risks.
 Fewer costly surprises through effective and transparent
contingency planning.