Which statement best describes risk assessment in an ERM framework?

Which statement best describes risk assessment in an ERM framework?

• A. Identify, analyze, prioritize risks
• B. Only identify risks
• C. Avoid risk completely
• D. Focus on compliance only

Answer: (A)

In ERM, risk assessment is an ongoing process of identifying potential risks, evaluating how likely they are and how big their impact could be, and prioritizing them so you know where to focus resources and actions. This approach captures the full flow from discovery to decision-making, ensuring that the most significant threats—and opportunities—receive attention. It isn’t about avoiding risk entirely, nor about focusing only on compliance; ERM looks at a broad range of risks across the organization and uses prioritization to allocate controls, responses, and monitoring where they matter most.

In ERM, risk assessment is an ongoing process of identifying potential risks, evaluating how likely they are and how big their impact could be, and prioritizing them so you know where to focus resources and actions. This approach captures the full flow from discovery to decision-making, ensuring that the most significant threats—and opportunities—receive attention. It isn’t about avoiding risk entirely, nor about focusing only on compliance; ERM looks at a broad range of risks across the organization and uses prioritization to allocate controls, responses, and monitoring where they matter most.