How is risk evaluation defined?

Risk evaluation is defined as the process of comparing estimated risks against established criteria to prioritize them effectively. This involves assessing the significance of identified risks based on their potential impact and likelihood of occurrence, which then helps organizations decide where to focus their risk management efforts.

In the context of risk management, simply identifying risks through surveys and interviews or reviewing past risk events does not encompass the full scope of the evaluation process. While those activities are important components, they precede the critical step of prioritization that risk evaluation entails. Additionally, developing new risk management software, though possibly beneficial for the overall risk management framework, is not related to the actual evaluation of risks themselves. The focus of risk evaluation is on understanding which risks require immediate attention based on a clear comparison against defined criteria.