An Extended Risk Assessment Framework for Risk Prioritization and Management: Introduction of the Risk Absolute Score (RAS)

John Francis T. Diaz
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John Francis T. Diaz: Department of Finance and Accounting, Asian Institute of Management, Makati City, Philippines

Economic Analysis Letters, 2025, vol. 4, issue 2, 21-25

Abstract: Effective risk management is crucial for organizational success. This paper introduces an expanded risk assessment framework that integrates traditional risk scoring with control strength assessment (hereafter referred to as “Control”) to better prioritize and manage potential risks. Using a 1-to-5 scoring system for Impact, Likelihood, and Control, the framework calculates a “Risk Absolute Score (RAS)” by dividing the conventional Risk Score by the Control rating. A higher RAS indicates either a high inherent risk or insufficient existing controls, signaling a greater need for managerial attention. This enhanced risk metric enables organizations to assess risks more holistically, incorporating the effectiveness of existing mitigation measures into prioritization decisions. This paper also addresses the gaps in conventional risk assessment methods and highlights the practical benefits of the RAS framework.

Keywords: Risk Assessment; Risk Management; Risk Prioritization; Risk Absolute Score; Control Strength Assessment (search for similar items in EconPapers)
Date: 2025
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