Concept 11
Inherent Risk vs Residual Risk
Comparing original risk with remaining risk.
Inherent Risk:
- Risk before controls
- Original risk level
- No protection yet
Residual Risk:
- Risk after controls
- Remaining risk
- Some protection already applied
Simple Example
Inherent risk = house can easily catch fire.
Smoke alarms and extinguishers are installed.
Residual risk = fire can still happen, but damage may be reduced.