What is defined as the identification, analysis, and economic control of risks?

The identification, analysis, and economic control of risks is best defined as risk management. This process encompasses a systematic approach to recognizing potential risks that could negatively impact an organization or individuals, assessing the magnitude of these risks, and implementing strategies to mitigate or manage them effectively.

Risk management is crucial in helping organizations protect their assets and ensure they are prepared for unexpected events. It involves not only identifying and analyzing risks but also determining the best ways to control these risks in an economically sound manner. This can include strategies such as risk avoidance, risk reduction, risk sharing, and risk retention.

Understanding risk management allows organizations to create a robust framework that supports decision-making processes and aligns risk tolerance with business objectives, ultimately leading to better operational resilience and financial performance.