What Is a Risk Profile?
Arisk profileis the formal listing and assessment of an agency's top risks. It identifies the risks that could significantly impact an organization’s ability to achieve its objectives and prioritizes them based on factors like likelihood and impact.
Why Is the Risk Profile Important?
The risk profile helps management focus on the most critical risks and allocate resources to address them effectively. It is a core element of enterprise risk management frameworks (e.g., COSO ERM).
In the federal government,OMB Circular A-123requires agencies to maintain a risk profile as part of their internal control and risk management processes.
Why Other Options Are Incorrect:
B. Risk Management Plan:This is broader and includes strategies for mitigating and monitoring risks, not just listing and assessing them.
C. Risk Assessment:This is a process used to identify and evaluate risks but does not specifically refer to the formal listing of risks.
D. Risk Register:While similar to a risk profile, a risk register typically includes more granular details, such as specific control measures, responsibilities, and timelines.
References and Documents:
OMB Circular A-123:Requires federal agencies to develop a risk profile as part of their risk management framework.
COSO ERM Framework (2017):Describes the risk profile as a tool for managing enterprise-wide risks.
