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Nominal Scale

A scale on which information is displayed in categories without any specific order. Usage Notes: Typical scales include: Blue, Green, Yellow Fruits, Vegetables Cars, Trucks Only the most simple operations, such  Full Article…

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Risk Tolerance

Is the level of risk that the organization is unwilling to exceed to achieve objectives.  

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Risk Financing

Provides funds to reduce the financial impact of undesirable effects experienced by an organization.

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Risk Culture

Includes the values, beliefs and behaviors about the governance, assurance and management of risk including: setting risk appetite and tolerances; views about impact of risk on conduct and decisions; and  Full Article…

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Risk Capacity

The maximum level of risk that the organization is able to address.

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Risk Appetite

The level of risk that the organization is willing to accept to achieve objectives.

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Risk Analysis Criteria

Are quantitative or qualitative values against which level of risk is evaluated.

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Respond

Desirable conditions and events with rewards; and correct undesirable conditions and events so that the organization recovers from and resolves each immediate issue and improves future performance.

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Residual Risk

Is the level of risk after actions and controls are in place.

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Requirement

Is something that an entity must address as a result of making a promise. Usage Notes Mandatory Requirement is a promise that is compelled by another party (such as the  Full Article…

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Quantitative Impact

Is a positive/negative affect on financial assets, tangible assets, intangible assets, business continuity, and health & safety.

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Procedure

Provides the “how to” of policies and guides their implementation; is audience-specific; provides exact instructions that will ensure compliance with a given policy.

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Proact

Proactively incent desirable conditions and events; and prevent undesirable conditions and events with management actions and controls.

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Planned Performance

Is the level of reward that the organization expects to gain once planned actions and controls are operating.

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Opportunity

Is an event that has, on balance, a desirable effect on achieving objectives.

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Notification

Provides multiple pathways to report the actual or potential occurrence of undesirable conditions, events and conduct; as well as the occurrence of desirable events.

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Management Culture

Includes the values, beliefs and behaviors about how processes, resources and the organization itself are internally directed, controlled and evaluated including: the way authority is delegated; the degree to which  Full Article…

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Management Actions

Are decisions, processes and use of associated resources which increase the likelihood that objectives are achieved.

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Inherent Risk

Is the level of risk in the absence of actions and controls.

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Target

A measurable value that an entity strives to achieve. Usage Notes Targets are used to guide activity. A target is a single value. A range of acceptable values is expressed  Full Article…

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Tolerance

The acceptable level of departure from a target. Usage Notes Tolerance is usually expressed using the same unit of measure as the target– or some percentage of the target. As  Full Article…

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Indicator

A metric that can be used to judge underlying activity. Usage Notes There are three types of indicators: leading indicator, lagging indicator and coincident indicator Indicators are metrics that can  Full Article…

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Metric

A single value obtained by direct measurement, or calculated using several other constituent values. Usage Notes “Total Sales” is a metric that directly measures the quantity of sales in a  Full Article…

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Coincident Indicator

An indicator that accurately represents current activity. Usage Notes Coincident indicators are often called real-time indicators.

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Leading Indicator

An indicator that predicts future activity. Usage Notes Leading indicators are difficult to design and, typically, require historical information to validate.

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Measure

To reduce the uncertainty of a value using a standardized unit of measure. A value or a metric. Usage Notes Measurement is not perfect. There will always be some sort of  Full Article…

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Velocity

A measure of how quickly an entity is impacted once an event occurs. Usage Notes Quantitatively, velocity is expressed using a unit of time (days, hours, minutes, seconds or some sub-second measure). Qualitatively,  Full Article…

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Event

An observable action, occurrence, or a change in condition. A change in knowledge about a condition, even if the condition did not change. NOTES A change in condition is easily  Full Article…

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is proportional to

Likelihood (Mathematical)

The hypothetical probability that an event that has already occurred would yield a specific outcome. Usage Notes Unlike probability, mathematical likelihood is used to evaluate past events. Historical Notes Formerly,  Full Article…

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Probability

A measure of the chance that an event (or set of events) will occur expressed on a linear scale from 0 (impossibility) to 1 (certainty). Usage Notes: Sometimes, probability is expressed  Full Article…

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Ordinal Scale

A scale on which information is displayed in order of magnitude because there is no standard of measurement of differences. Usage Notes: Typical scales include: High, Medium, Low Hot, Medium,  Full Article…

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Likelihood

A measure of the chance of an event occurring. Usage Notes Quantitatively, likelihood is typically expressed as either: Probability Likelihood (Mathematical) Qualitatively, likelihood is typically expressed using an Ordinal Scale (high, medium, low). Be careful  Full Article…

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Negative Effect

(when dealing with a future event) A measure, expressed as a function of the likelihood that an event may occur, how fast the event may impact objectives and the estimated negative  Full Article…

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Risk

A measure of the negative effect of uncertainty on achieving objectives. A measure of the likelihood that an event may occur, how fast the event may impact the entity, and the estimated  Full Article…

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Governance

The act of externally and indirectly guiding, controlling and evaluating an entity, process or resource. Usage Notes Governance is different from management because governance must be EXTERNAL to the object  Full Article…

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