What is a formal risk assessment?
Formal risk assessments are processes that consider the value of the assets that are at risk, the business and technical threats to the assets, and the effectiveness of the business and technical controls that are designed to protect the asset. In the end, a risk assessment gives the organization an objective measure of the risk to an asset. The process forces the organization to acknowledge and accept the risk, eliminate the risk by terminating a business practice (e.g., stop offering access to the asset via the Web), transfer the risk by outsourcing or insurance, or, more often than not, select additional more effective business or technical controls to reduce the risk.
Benefits Of Formal Risk Assessments
Conducting formal assessments within a risk management program offers a number of benefits: