When applying Operational Risk Management (ORM), which step directly follows identifying hazards?

When applying Operational Risk Management (ORM), which step directly follows identifying hazards?

• A. Develop controls.
• B. Assess hazards.
• C. Monitor effectiveness.
• D. Implement controls.

Answer: (B)

Hazard identification is followed by risk assessment. Once you’ve identified what could go wrong, you evaluate how serious it is by looking at both the likelihood of the hazard causing harm and the potential consequences. This assessment yields a risk level that helps you prioritize which hazards to control first and how aggressively to address them. The next steps depend on that understanding: you develop controls to reduce or eliminate risk, implement those controls, and then monitor their effectiveness to ensure the risk remains acceptable. The order matters because you can’t effectively choose and apply controls without knowing the level of risk you’re dealing with.

Hazard identification is followed by risk assessment. Once you’ve identified what could go wrong, you evaluate how serious it is by looking at both the likelihood of the hazard causing harm and the potential consequences. This assessment yields a risk level that helps you prioritize which hazards to control first and how aggressively to address them. The next steps depend on that understanding: you develop controls to reduce or eliminate risk, implement those controls, and then monitor their effectiveness to ensure the risk remains acceptable. The order matters because you can’t effectively choose and apply controls without knowing the level of risk you’re dealing with.