Which of the following best describes a risk assessment?

The choice that best describes a risk assessment is an analysis to identify potential risks and their impacts. This definition encapsulates the core purpose of a risk assessment, which is to systematically evaluate the various risks that an organization may face, ranging from operational to financial, compliance, reputational, and strategic risks. The aim is to identify what could go wrong, understand the likelihood and impact of these events, and develop strategies for mitigation and response.

In a risk assessment, the focus is not just on identifying risks but also on comprehensively analyzing how they can affect the organization's objectives. This process typically includes evaluating the potential severity of risks, prioritizing them based on their likelihood and impact, and deciding on appropriate risk management strategies.

The other options do not capture the breadth and intent of a risk assessment. Reviewing financial statements relates to financial analysis rather than a holistic examination of risks. A study focused solely on operational improvements disregards the larger scope of risk that could include strategic, financial, reputational, and compliance issues. Lastly, assessing market trends might involve analyzing data for business strategy but does not directly relate to identifying or managing risks in various areas as a risk assessment would.