Inherent risk, in Risk management, is an assessed level of raw or untreated risk; that is, the natural level of risk inherent in a process or activity without doing anything to reduce the likelihood or mitigate the severity of a mishap, or the amount of risk before the application of the risk reduction effects of controls.
One of the main arguments against the use of inherent risk as a concept is the perceived difficulty in determining its level. Where the inherent risk can be assessed, it assists in identifying which controls are key.
- Inherent risk (accounting), particularly, the consideration of the probability of material misstatements in financial records
- Gregory Monahan (2008). Enterprise Risk Management: A Methodology for Achieving Strategic Objectives. John Wiley & Sons.
- Tattam, David. "Inherent Risk – Is it useful?". Protecht Risk Management Insights. Retrieved 2017-05-01.
|This business term article is a stub. You can help Wikipedia by expanding it.|
|This technology-related article is a stub. You can help Wikipedia by expanding it.|