Risk assessment is the determination of quantitative or qualitative value of risk related to a concrete situation and a recognized threat (also called hazard). Quantitative risk assessment requires calculations of two components of risk(R):, the magnitude of the potential loss (L), and the probability (p) that the loss will occur.
A Security Risk Assessment (or SRA) is a method of evaluating risks in your company, technology, and processes in order to ensure that controls are in place to protect against security threats. Compliance standards, such as the PCI-DSS standards for credit card security, generally involve security risk assessments. They are mandated by the AICPA as part of a SOC II audit for service organisations, as well as ISO 27001, HITRUST CSF, and HIPAA compliance, to mention a few. As a result, security risk assessments are often referred to as risk assessments, IT infrastructure risk assessments, security risk audits, and security audits.
A security assessor will review all parts of your company’s systems to discover areas of danger during a security risk assessment. These vulnerabilities could be as basic as a system that permits users to use weak passwords, or they could be more significant concerns like unsafe business processes. In order to detect potential hazards, the assessor will often go over everything from HR rules to firewall setups.
During the discovery phase, an assessor, for example, will identify all databases having sensitive information, which is an asset. Because the database is connected to the internet, it poses a security risk. You must have a control in place to protect that asset, which in this situation would be a firewall. You’ve already taken the first step toward risk reduction.
A security risk assessment evaluates all of your company’s essential assets, vulnerabilities, and controls to ensure that all risks have been adequately managed.
1. Identifying Risks
Prioritizing risk management tasks and allocating resources appropriately requires identifying threats and ranking risks in a methodical manner based on the potential for harm. A risk profile is a detailed description of prospective dangers, such as:
You may use this information to focus on the high-impact, high-probability dangers first, and then work your way down to the threats that are less likely to occur and inflict less damage.
2. Cost Management
Regular IT risk assessments can assist your firm avoid squandering money on security. You can balance costs and benefits by appropriately estimating risk: you can select the most unacceptable risks and direct resources toward them rather than less likely or less harmful hazards.
3. Adherence to Legal Requirements
Most businesses must adhere to numerous regulations’ privacy and data security obligations. Any company that does business with European people, for example, must assess their risk in order to comply with the GDPR on a regular basis.
