Managing Risks

Control Risks Probability of loss arising from the tendency of internal control systems to lose their effectiveness over time. How can you prevent this from happening?

Transfer Risks The purpose of this action is to take a specific risk, which is detailed in the insurance contract, and pass it from one party who does not wish to have this risk, the insured, to a party who is willing to take on the risk for a fee, or premium, the insurer.

Retain Risks Risk management strategy under which a decision maker assumes all or part of a risk.

Avoid Risks Escapement from a liability or obligation generally through ingenious and (unlike evasion) legal means, such as tax avoidance.

Human Risk Perils caused by human errors as well as the unpredictability of customers, employees, or the work environment.

Economic Risk Risks that result from changes in overall business conditions.