Which of the following is the best reason for performing risk assessment?

A.
To determine the present state of risk

B.
To analyze the effect on the business

C.
To satisfy regulatory requirements

D.
To budget appropriately for the application of various controls

Explanation:

Risk assessment is a process of analyzing the identified risk, both quantitatively and qualitatively.
Quantitative risk assessment requires calculations of two components of risk, the magnitude of the
potential loss, and the probability that the loss will occur. While qualitatively risk assessment

checks the severity of risk. Hence risk assessment helps in determining the present state of the
risk.
Answer D is incorrect. Budgeting appropriately is one the results of risk assessment but is not the
reason for performing the risk assessment.
Answer B is incorrect. Analyzing the effect of risk on an enterprise is the part of the process while
performing risk assessment, but is not the reason for doing it.
Answer C is incorrect. Performing risk assessment may satisfy the regulatory requirements, but is
not the reason to perform risk assessment.