Risk assessment is a step in a risk management Risk Management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, process. Risk assessment Educational assessment is the process of documenting, usually in measurable terms, knowledge, skills, attitudes and beliefs. Assessment can focus on the individual learner, the learning community , the institution, or the educational system as a whole. According to the Academic Exchange Quarterly: "Studies of a theoretical or empirical nature 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 Risk is a concept that denotes the precise probability of specific eventualities. Technically, the notion of risk is independent from the notion of value and, as such, eventualities may have both beneficial and adverse consequences. However, in general usage the convention is to focus only on potential negative impact to some characteristic of: R, the magnitude of the potential loss L, and the probability p, that the loss will occur.
Methods may differ whether it is about general financial decisions or environmental or public health risk assessment.
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Explanation
Risk assessment consists in an objective evaluation of risk in which assumptions and uncertainties are clearly considered and presented. Part of the difficulty of risk management is that measurement of both of the quantities in which risk assessment is concerned - potential loss and probability of occurrence - can be very difficult to measure. The chance of error in the measurement of these two concepts is large. A risk with a large potential loss and a low probability of occurring is often treated differently from one with a low potential loss and a high likelihood of occurring. In theory, both are of nearly equal priority in dealing with first, but in practice it can be very difficult to manage when faced with the scarcity of resources, especially time, in which to conduct the risk management process. Expressed mathematically,
Risk assessment in an financial point of view.Financial decisions, such as insurance, express loss in terms of dollar amounts. When risk assessment is used for public health or environmental decisions, loss can be quantified in a common metric,such as a country's currency, or some numerical measure of a location's quality of life. For public health and environmental decisions, loss is simply a verbal description of the outcome, such as increased cancer incidence or incidence of birth defects. In that case, the "risk" is expressed as:
If the risk estimate takes into account information on the number of individuals exposed, it is termed a "population risk" and is in units of expected increased cases per a time period. If the risk estimate does not take into account the number of individuals exposed, it is termed an "individual risk" and is in units of incidence rate per a time period. Population risks are of more use for cost/benefit analysis; individual risks are of more use for evaluating whether risks to individuals are "acceptable"....
Risk assessment in public health
In the context of public health Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals." [citation needed] It is concerned with threats to the overall health of a community based on population health, risk assessment is the process of quantifying the probability of a harmful effect to individuals or populations from certain human activities. In most countries, the use of specific chemicals, or the operations of specific facilities (e.g. power plants, manufacturing plants) is not allowed unless it can be shown that they do not increase the risk of death or illness above a specific threshold. For example, the American Food and Drug Administration The Food and Drug Administration is an agency of the United States Department of Health and Human Services and is responsible for regulating and supervising the safety of foods, dietary supplements, drugs, vaccines, biological medical products, blood products, medical devices, radiation-emitting devices, veterinary products, and cosmetics. The FDA (FDA) regulates food safety through risk assessment.[1] The FDA required in 1973 that cancer-causing compounds must not be present in meat at concentrations that would cause a cancer risk greater than 1 in a million lifetimes.
How the risk is determined
In the estimation of the risks, three or more steps are involved, requiring the inputs of different disciplines:
- Hazard Identification, aims to determine the qualitative nature of the potential adverse consequences of the contaminant (chemical, radiation, noise, etc.) and the strength of the evidence it can have that effect. This is done, for chemical hazards, by drawing from the results of the sciences of toxicology Toxicology is the study of the adverse effects of chemicals on living organisms. It is the study of symptoms, mechanisms, treatments and detection of poisoning, especially the poisoning of people and epidemiology Epidemiology is the study of factors affecting the health and illness of populations, and serves as the foundation and logic of interventions made in the interest of public health and preventive medicine. It is considered a cornerstone methodology of public health research, and is highly regarded in evidence-based medicine for identifying risk. For other kinds of hazard, engineering or other disciplines are involved.
- Dose-Response Analysis, is determining the relationship between dose and the probability or the incidence of effect (dose-response assessment). The complexity of this step in many contexts derives mainly from the need to extrapolate results from experimental animals (e.g. mouse A mouse is a small mammal belonging to the order of rodents. The best known mouse species is the common house mouse (Mus musculus). It is also a popular pet. The American white-footed mouse (Peromyscus leucopus) and the deer mouse (Peromyscus maniculatus) also sometimes live in houses. In some places, certain kinds of field mice are also common, rat Rats are various medium-sized, long-tailed rodents of the superfamily Muroidea. "True rats" are members of the genus Rattus, the most important of which to humans are the black rat, Rattus rattus, and the brown rat, Rattus norvegicus. Many members of other rodent genera and families are also called rats and share many characteristics) to humans, and/or from high to lower doses. In addition, the differences between individuals due to genetics Genetics , a discipline of biology, is the science of heredity and variation in living organisms. The fact that living things inherit traits from their parents has been used since prehistoric times to improve crop plants and animals through selective breeding. However, the modern science of genetics, which seeks to understand the process of or other factors mean that the hazard may be higher for particular groups, called susceptible populations. An alternative to dose-response estimation is to determine an effect unlikely to yield observable effects, that is, a no effect concentration. In developing such a dose, to account for the largely unknown effects of animal to human extrapolations, increased variability in humans, or missing data, a prudent approach is often adopted by including safety factors in the estimate of the "safe" dose, typically a factor of 10 for each unknown step.
- Exposure Quantification, aims to determine the amount of a contaminant (dose) that individuals and populations will receive. This is done by examining the results of the discipline of exposure assessment Exposure assessment is a branch of environmental science that focuses on the processes that take place at the interface between the environment containing the contaminant of interest and the organism(s) being considered. These are the final steps in the path to release an environmental contaminant, through transport to its effect in a biological. As different location, lifestyles and other factors likely influence the amount of contaminant that is received, a range or distribution of possible values is generated in this step. Particular care is taken to determine the exposure of the susceptible population(s).
Finally, the results of the three steps above are then combined to produce an estimate of risk. Because of the different susceptibilities and exposures, this risk will vary within a population.
Small subpopulations
When risks apply mainly to small subpopulations, there is uncertainty at which point intervention is necessary. What if a risk is very low for everyone but 0.1% of the population? A difference exists whether this 0.1% is represented by *all infants younger than X days or *recreational users of a particular product. If the risk is higher for a particular sub-population because of abnormal exposure rather than susceptibility, there is a potential to consider strategies to further reduce the exposure of that subgroup. If an identifiable sub-population is more susceptible due to inherent genetic or other factors, there is a policy choice whether to set policies for protecting the general population that are protective of such groups (as is currently done for children when data exists, or is done under the Clean Air Act for populations such as asthmatics) or whether if the group is too small, or the costs to high. Sometimes, a suitable position is to at least limit the risk of the more susceptible to some risk level above which it seems too inequitable to leave them out of the risk.
Acceptable risk increase
The idea of not increasing lifetime risk by more than one in a million has become common place in public health discourse and policy. How consensus settled on this particular figure is unclear. In some respects, this figure has the characteristics of a mythical number. In another sense, the figure provides a numerical basis for what to consider a negligible increase in risk. Some current environmental decision making allows some discretion to deem individual risks potentially "acceptable" if below one in ten thousand increased lifetime risk. Low risk criteria such as these do provide some protection for the case that individuals may be exposed to multiple chemicals (whether pollutants or food additives, or other chemicals). But both of these benchmarks are clearly small relative to the typical one in four lifetime risk of death by cancer (due to all causes combined) in developed countries. On the other hand, adoption of a zero-risk policy could be motivated by the fact that the 1 in a million policy still would cause the death of hundreds or thousands of people in a large enough population. In practice however, a true zero-risk is possible only with the suppression of the risk-causing activity.
More stringent requirements, or even the 1 in a million one, may not be technologically feasible at a given time, or so expensive as to render the risk-causing activity unsustainable, resulting in the optimal degree of intervention being a balance between risks vs. benefit. For example, it might well be that the emissions from hospital incinerators result in a certain number of deaths per year. However, this risk must be balanced against the available alternatives. In some unusual cases, there are significant public health risks, as well as economic costs, associated with all options. For example, there are risks associated with no incineration Incineration is a waste treatment technology that involves the combustion of organic materials and/or substances. Incineration and other high temperature waste treatment systems are described as "thermal treatment". Incineration of waste materials converts the waste into incinerator bottom ash, flue gases, particulates, and heat, which (with the potential risk for spread of infectious diseases) or even no hospitals. But, often further investigation identifies further options, such as separating noninfectious from infectious wastes, or air pollution controls on a medical incinerator, that provide a broad range of options of acceptable risk - though with varying practical implications and varying economic costs. Intelligent thought about a reasonably full set of options is essential. Thus, it is not unusual for there to be an iterative process between analysis, consideration of options, and then further analysis.
Risk assessment in auditing
In auditing, risk assessment is a very crucial stage before accepting an audit engagement. According to ISA315 Understanding the Entity and its Environment and Assessing the Risks of Material Misstatement, "the auditor should perform risk assessment procedures to obtain an understanding of the entity and its environment, including its internal control."<evidence relating to the auditor’s risk assessment of a material misstatement in the client’s financial statements. Then, auditor obtains initial evidence regarding the classes of transactions at the client and the operating effectiveness of the client’s internal controls.In auditing, audit risk includes inherent risk Inherent risk, in auditing, is the risk that the account or section being audited is materially misstated without considering internal controls due to error; inherent risk does not include an assessment of the risk of material misstatement due to fraud. The assessment of inherent risk depends on the professional judgement of the auditor, and it is, control risk and detection risk.
Risk assessment in information security
There are two methods of risk assessment in information security field, qualitative and quantitative.[2] Purely quantitative risk assessment is a mathematical calculation based on security metrics on the asset (system or application). Qualitative risk assessment is performed when the organization requires a risk assessment be performed in a relatively short time or to meet a small budget, a significant quantity of relevant data is not available, or the persons performing the assessment don't have the sophisticated mathematical, financial, and risk assessment expertise required.[2] Qualitative risk assessment can be performed in a shorter period of time and with less data. Qualitative risk assessments are typically performed through interviews of a sample of personnel from all relevant groups within an organization charged with the security of the asset being assessed. Qualitative risk assessments are descriptive versus measurable.
Quantitative risk assessment
Further information: Quantitative Risk Assessment softwareQuantitative risk assessments include a calculation of the single loss expectancy (SLE) of an asset. The single loss expectancy can be defined as the loss of value to asset based on a single security incident. The team then calculates the annualized rate of occurrence (ARO) of the threat to the asset. The ARO is an estimate based on the data of how often a threat would be successful in exploiting a vulnerability. From this information, the annualized loss expectancy (ALE) can be calculated. The annualized loss expectancy is a calculation of the single loss expectancy multiplied the annual rate of occurrence, or how much an organization could estimate to lose from an asset based on the risks, threats, and vulnerabilities. It then becomes possible from a financial perspective to justify expenditures to implement countermeasures to protect the asset.
Criticisms of quantitative risk assessment
Barry Commoner Barry Commoner is an American biologist, college professor, and eco-socialist. He ran for president of the United States in the 1980 U.S. presidential election on the Citizens Party ticket, Brian Wynne and other critics have expressed concerns that risk assessment tends to be overly quantitative and reductive. For example, they argue that risk assessments ignore qualitative differences among risks. Some charge that assessments may drop out important non-quantifiable or inaccessible information, such as variations among the classes of people exposed to hazards. Furthermore, Commoner and O'Brien claim that quantitative approaches divert attention from precautionary or preventative measures.[3]Others, like Nassim Nicholas Taleb consider risk managers little more than "blind users" of statistical tools and methods.[4]
See also
- Benefit risk
- Cost risk
- Edwards v. National Coal Board Edwards v. National Coal Board was an important case in English case law. The 1949 case revolved around whether it was "reasonably practicable" to prevent even the smallest possibility of a rock fall in a coal mine
- Flood risk assessment A flood risk assessment is an assessment of the risk of flooding, particularly in relation to residential, commercial and industrial land use
- Form 696
- Green Globe EC3 Global offers a managed Green Globe program which is supported by the science and technology of the The Sustainable Tourism CRC , the worlds largest dedicated, not for profit, research centre specialising in sustainable tourism. This web-delivered program is based on the Agenda 21 principles for Sustainable Development endorsed by 182 Heads of
- Health Impact Assessment Health Impact Assessment is defined as "a combination of procedures, methods and tools by which a policy, program or project may be judged as to its potential effects on the health of a population, and the distribution of those effects within the population." (ECHP 1999, p. 4)
- Information assurance
- List of auditing topics
- ISO 31000
- ISO 28000
- Megaprojects and risk Megaprojects and Risk: An Anatomy of Ambition is a 2003 book by Bent Flyvbjerg, Nils Bruzelius, and Werner Rothengatter dealing with the risks and legalities of promotion, policy, planning, and construction of megaprojects. The book's central theme is that promoters of multibillion-dollar megaprojects may misinform lawmakers, the media, and the
- Optimism bias Optimism bias is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions. This includes over-estimating the likelihood of positive events and under-estimating the likelihood of negative events. It is one of several kinds of positive illusion to which people are generally susceptible
- Probabilistic risk assessment Probabilistic risk assessment (or probabilistic safety assessment/analysis) is a systematic and comprehensive methodology to evaluate risks associated with a complex engineered technological entity (such as an airliner or a nuclear power plant)
- Probit model
- Reference class forecasting Reference class forecasting predicts the outcome of a planned action based on actual outcomes in a reference class of similar actions to that being forecast. The theories behind reference class forecasting were developed by Daniel Kahneman and Amos Tversky. They helped Kahneman win the 2002 Nobel Prize in Economics
- Risk management Risk Management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents,
- Security Risk
- Strategic misrepresentation Strategic misrepresentation is the planned, systematic distortion or misstatement of fact—lying—in response to incentives in the budget process. Examples of strategic misrepresentation in budgeting illustrate that it is a contingent strategy responsive to a system of rewards in a highly competitive game where resource constraints are present
External links
- EPA's Risk Assessment Portal - with links to guidance documents, applicable laws, and US EPA Risk Assessments*'Realities of Risk' Freeview video by the Vega Science Trust and the BBC/OU
- 'Population-based Management of Disease' Example of risk management in health care
- 'HWI RAT' Risk Assessment Tools for different sectors. European Agency for Safety and Health at Work The European Agency for Safety and Health at Work was set up in 1996 in Bilbao, Spain. Its mission is "to make Europe's workplaces safer, healthier and more productive. This is done by bringing together and sharing knowledge and information, to promote a culture of riskprevention" (OSHA).
- Graham, John. Improving chemical risk assessment in Regulation: The Cato Review of Business & Government [1]
- Mission Diagnostic Protocol, Version 1.0: A Risk-Based Approach for Assessing the Potential for Success is a technical report that defines a new management approach for assessing risk in complex settings. Published March 2008, Software Engineering Institute The Carnegie Mellon Software Engineering Institute is a federally funded research and development center headquartered on the campus of Carnegie Mellon University in Pittsburgh, Pennsylvania, United States. SEI also has offices in Arlington, Virginia, and Frankfurt, Germany. The SEI operates with major funding from the U.S. Department of Defense.
- Carcinogenic Potency Database
References
Footnotes
- ^ Merrill, Richard A. "Food Safety Regulation: Reforming the Delaney Clause" in Annual Review of Public Health, 1997, 18:313-40. This source includes a useful historical survey of prior food safety regulation.
- ^ a b Official (ISC)2 Guide to CISSP CBK. Risk Management: Auerbach Publications. 2007. pp. 1065.
- ^ Commoner, Barry. O'Brien, Mary. Shrader-Frechette and Westra 1997.
- ^ THE FOURTH QUADRANT: A MAP OF THE LIMITS OF STATISTICS [9.15.08]Nassim Nicholas Taleb An Edge Original Essay
General references
- Nyholm, J, 2009 "Persistency, bioaccumulation and toxicity assessment of selected brominated flame retardants"
- Anderson, K. "Intelligence-Based Threat Assessments for Information Networks and Infrastructures: A White Paper", 2005.
- Barry Commoner Barry Commoner is an American biologist, college professor, and eco-socialist. He ran for president of the United States in the 1980 U.S. presidential election on the Citizens Party ticket. “Comparing apples to oranges: Risk of cost/benefit analysis” from Contemporary moral controversies Controversy is a state of prolonged public dispute or debate usually concerning a matter of opinion. The term originates circa 1384 from Latin controversia, as a composite of controversus - "turned in an opposite direction," from contra - "against" - and vertere - to turn, or versus , hence, "to turn against." in technology, A. P. Iannone, ed., pp. 64-65.
- Flyvbjerg, Bent, "From Nobel Prize to Project Management: Getting Risks Right." Project Management Journal, vol. 37, no. 3, August 2006, pp. 5-15.
- Harremoës, Poul, ed. Late lessons from early warnings: the precautionary principle The precautionary principle is a moral and political principle which states that if an action or policy might cause severe or irreversible harm to the public or to the environment, in the absence of a scientific consensus that harm would not ensue, the burden of proof falls on those who would advocate taking the action. The principle implies that 1896–2000.
- Mary O’Brien. Making better environmental decisions: an alternative to risk assessment.
- Deborah G. Mayo. “Sociological versus metascientific views of technological risk assessment” in Shrader-Frechette and Westra.
- Shrader-Frechette, Kristin and Laura Westra. Technology and values.
- Hallenbeck, William H. Quantitative risk assessment for environmental and occupational health. Chelsea, Mich.: Lewis Publishers, 1986
- Lerche, I. (Ian) Environmental risk assessment : quantitative measures, anthropogenic influences, human impact. Berlin: Springer, 2006.
- A Review of risk assessment methodologies by the Congressional Research Service The Congressional Research Service is the public policy research arm of the United States Congress. As a legislative branch agency within the Library of Congress, CRS works exclusively and directly for Members of Congress, their Committees and staff on a confidential, nonpartisan basis. CRS reports are highly regarded as in-depth, accurate,, Library of Congress for the Subcommittee on Science, Research, and Technology. Washington: U.S. GPO, 1983.
- John M. Lachin. Biostatistical methods: the assessment of relative risks.
- Science and judgment in risk assessment. Committee on Risk Assessment of Hazardous Air Pollutants, Board on Environmental Studies and Toxicology, Commission on Life Sciences, National Research Council The National Research Council of the USA is the working arm of the United States National Academy of Sciences and the United States National Academy of Engineering, carrying out most of the studies done in their names. Washington, D.C.: National Academy Press, 1994.
- Danny Lieberman, "Using a Practical Threat Modeling Quantitative Approach for data security", 2009
Categories: Evaluation | Impact assessment | Public health Categories: Health fields | Health economics | Health policy | Risk Categories: Core issues in ethics | Security | Information, knowledge, and uncertainty | Applied probability | Occupational safety and health Categories: Safety | Health fields | Labour relations | Probability assessment
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