What does 'inherent risk' refer to in risk assessment?

Inherent risk refers to the level of risk that exists before any actions are taken to mitigate it. This concept is critical in risk assessment because it highlights the natural level of risk present in a given situation or environment. The understanding of inherent risk serves as a baseline for organizations to evaluate potential vulnerabilities and the effectiveness of any mitigation strategies employed afterward.

Recognizing inherent risk allows organizations to identify areas where they might be exposed to threats and prepares them to take necessary actions for risk management. This foundational understanding helps inform subsequent steps in the risk management process, such as assessing the residual risk after implementing controls or mitigation tactics.

Mitigation efforts aim to reduce inherent risk, but they do not change the initial risk profile, which remains crucial for comprehensive risk assessment practices. The other concepts listed, while related to risk, do not capture the definition of inherent risk accurately.