How do risk assessment and risk management work together?

Risk assessment and risk management are complementary processes that work hand in hand to ensure effective handling of potential risks within an organization or project. The process of risk assessment involves the identification, analysis, and evaluation of risks that could negatively impact the achievement of objectives. This step is crucial as it helps organizations understand what threats they are facing and how significant those threats are.

Once risks have been identified through the assessment process, risk management takes over to develop strategies and actions to address those risks effectively. This may involve mitigating, transferring, avoiding, or accepting the risks, depending on the organization's risk appetite and management strategy. By integrating these two processes, an organization can create a comprehensive approach to safeguarding its assets and achieving its goals.

The other options do not accurately represent the functions of risk assessment and risk management. Effective risk management cannot operate without the foundational insights provided by risk assessment, and risk assessment does not have the authority or purpose to mitigate risks on its own. Additionally, risk assessment is not limited to an annual occurrence; it should be an ongoing process to adapt to new risks as they are identified or as circumstances change.