What is the ultimate purpose of a risk assessment?

The ultimate purpose of a risk assessment is to identify, evaluate, and prioritize risks in order to minimize their potential negative impacts. This encompasses a systematic process where risks are identified, their likelihood and impact are assessed, and they are prioritized based on these factors. By understanding the various risks that an organization may face, appropriate strategies can be developed to manage or mitigate these risks effectively. This proactive approach ensures that decision-makers are informed and can allocate resources efficiently to manage risks, ultimately protecting the organization's interests and enhancing its ability to achieve its objectives.

While creating a theoretical model of potential risks can be a component of risk assessment, it does not encompass the broader purpose of actionable risk management. Developing strategies for risk elimination touches on an aspect of risk assessment, but it is more focused on mitigation rather than the broader scope of identifying and evaluating. Satisfying regulatory requirements represents a secondary consideration and does not capture the comprehensive mission of risk assessment, which is fundamentally about safeguarding an organization's assets and missions through informed risk management practices.