Risk Definitions

Definitions of Commonly Used Terms

Control: Any action taken to enhance the likelihood that established objectives and goals will be achieved.

Designated responsible party: Individuals who are identified as risk owners and who are responsible for managing risk at the University.

Impact: It is an estimate of the potential losses associated with an identified risk. Result or effect - there may be a range of possible impacts associated with an event. The impact of an event can be positive or negative relative to the entity's related objectives.

Risk: The chance of loss or gain; the possibility that an event will occur that affects the achievement of an organization’s mission or objectives.

Risk Assessment: A process for identifying and assessing risks so that the organization can achieve its objectives.

Risk Avoidance: Avoiding the activities giving rise to risk.

Risk Evaluation: Comparing the results of Risk Estimation to established criteria for the purpose of determining the significance of risks and whether to accept them or treat them (see also Risk Mitigation and Avoidance).

Risk Identification: The determination of risks that are material, i.e., that potentially can impact the achievement of objectives.

Risk Mitigation: Actions which reduce a risk or its consequences (see Risk Strategies).

Risk Mitigation Plan: A comprehensive strategy used to mitigate risk within an organization. The mitigation plan identifies compliance controls, monitoring activities and reporting responsibilities for each risk. Risk Mitigation Plan Template 

Risk Strategies: Possible responses to risk situations such as: Avoidance, Acceptance, Sharing, Reduction (see Risk Mitigation).

Probability: The likelihood that a risk will become a reality.

Process: A set of linked tasks that are controlled by a common set of policies and procedures and generate a common set of risks. In the major activity area of Finance, for example, processes may include financial reporting, accounts receivable, accounts payable, and cash management.