In risk management, what does risk evaluation involves?

Risk evaluation involves rating the risks that may happen based on the likelihood of them happening. Risk evaluation also involves rating these potential happenings based on the impact they could have on the business. Evaluating risk is a step in the creative process of risk management.

Explanation

Risk evaluation is the identification of risks in an organisation by the management through a framework put in a place by them. In risk evaluation, the focus is to identify what constitutes risk for the business and make a qualitative and quantitative analysis of the risk, with the intention of managing those risks within the risk appetite of the organisation. Without risk evaluation, risk management will not be possible, because there will be no way for management to determine the risks inherent in their operation and how they can control them based on benefits and control involved.