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301 Key Term
Risk
| Term | Definition |
|---|---|
| Acceptance | A risk-response strategy that involves accepting a risk’s consequences because the potential payoff is higher than the losses; also known as risk retention or assumption. |
| Audit report | A document that describes the accuracy and appropriateness of a business’s information, processes, or systems |
| Avoidance | A risk-response strategy that involves choosing not to do something considered risky. |
| Brand erosion | The deterioration or destruction of a corporate or product brand. |
| Chief risk officer (CRO) | An executive responsible for a business’s risk-management activities, which include planning, controlling, preventing, and limiting of business losses and enhancing possibilities for gain. |
| Contingency plan | The specific guidelines that are used when responding to undesirable circumstances; an alternative course of action . |
| Credit downgrade | The reduction of a business’s credit rating or measure of relative credit risk; usually accompanied by an increase in expenses and a decrease in creditworthiness. |
| Environmental scan | A three-step process in which businesses gather information on their surroundings, analyze that information, and determine its future impact of that information. |
| Exchange rate | The price or value at which one currency can be converted to another. |
| Fallback plan | Guidelines explaining what to do and how to recover if a contingency plan fails. |
| Financial risks | Possible event and situation that directly impact a company's cash flow. |
| Hazard risk | Potential events or situations that can cause injury or harm to people, property, or the environment. |
| Impact | The effect or influence of an event. |
| Incident log | A record of accidents, injuries, and other mishaps occurring at a particular business or in a certain department. |
| Mitigation | A risk-response strategy that involves reducing or controlling the impact of a risk if it occurs. |
| Operational risks | Possible events and situations resulting from employee actions, core processes, and daily business activities. |
| Proactive | Adapting to the environment in advance of the occurrence of events; taking advantage of opportunities rather than reacting to problems. |
| Probability | The likelihood that an event will occur. |
| Prospective risks | Risks that have not happened before but could occur in the future. |
| Pure risks | A risk that carries the possibility of loss or no loss. |
Created by:
Martin.A
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