Residual risks refer to what?

Residual risks are defined as the risks that remain after appropriate and effective controls have been applied to mitigate or eliminate certain potential threats. In the context of risk management, organizations implement various strategies and controls to address identified risks, but it is often impossible to eliminate all risks entirely. Consequently, the remaining risks that have not been fully mitigated are referred to as residual risks.

Understanding residual risks is crucial because they represent a potential exposure that the organization must be prepared to manage even after controls are in place. This concept emphasizes the importance of continuous risk assessment and management, as the environment and context in which an organization operates may change, leading to new risks or altering the profile of existing risks.

The other options describe different aspects of risk but do not accurately capture the definition of residual risks. Some risks can be managed and mitigated to varying degrees, and it is incorrect to claim that they can never be addressed or that they are exclusive to larger organizations. Additionally, risks identified during the initial assessment may refer to potential risks before controls are implemented, rather than those that persist after mitigation efforts.