What is the primary purpose of a risk assessment?

The primary purpose of a risk assessment is to identify, analyze, and evaluate potential risks that could negatively impact an organization. This process is essential for organizations to understand the various internal and external factors that might jeopardize their objectives. By systematically identifying risks, organizations can prioritize them based on their potential impact and likelihood, enabling informed decision-making.

Comprehensive risk assessments allow businesses to anticipate potential challenges, thus preparing them to implement appropriate risk management strategies. This proactive approach serves to safeguard the organization's assets, reputation, and overall operational integrity.

While compliance with laws and regulations, opportunities for growth, and employee performance improvement are important aspects of an organization's overall strategy, they do not capture the fundamental essence and objectives of a risk assessment, which is primarily concerned with understanding and managing risk.