Residual Risk

The residual risk is the amount of risk in the process after all risks have been calculated and every effort has been made to identify and eliminate the risk in a given situation. In other words, it is the degree of exposure to a potential risk even after the danger has been identified and the compliance has been effective.

During an investment or business process, it involves a lot of risk and the entity considers all such risks. This causes or eliminates all known risks of the process. The risks involved in the process can be caused by unknown factors or by known factors such as hedges that cannot be hedged or prevented; such risks are called residual risk.

For the rest, there are four main ways to approach the risk: reduce it, avoid it, acknowledge it, or move on. Because residuals are risky and often unknown, many companies choose to accept or transfer them, for example, risk residual outsourcing services to a third party organization.

The remaining risks are determined when you make the initial risk assessment - you use the same method, the same assessment scale, etc.), so the probability of an event is usually reduced and sometimes the effect is less.