What is the term used to describe the level of risk in the absence of actions and controls?

What is the term used to describe the level of risk in the absence of actions and controls?
A . Uncontrolled Risk
B . Inherent Risk
C . Vulnerability
D . Residual Risk

View Answer

Answer: B

Explanation:

Inherent Risk refers to the level of risk present before any mitigation actions or controls are applied.

Definition:

It represents the natural level of risk associated with an activity or environment without considering risk management measures.

Contrasted with Residual Risk:

Residual Risk is the risk remaining after mitigation efforts are applied.

Why Other Options Are Incorrect:

A (Uncontrolled Risk): Not a standard risk management term.

C (Vulnerability): Refers to weaknesses that increase susceptibility to risk, not the risk level itself.

D (Residual Risk): Comes after controls are applied, opposite to inherent risk.

Reference: COSO ERM Framework: Discusses inherent risk as a baseline for evaluating control effectiveness.

ISO 31000 (Risk Management): Explains inherent risk in the context of risk assessments.