Master the 2025 CRISC Challenge – Grab Your Risk Control Superpowers!

Residual risk refers to the remaining risk that exists after management has implemented specific risk response measures or controls to mitigate identified risks. It is the level of risk that remains after considering the effectiveness of those measures. When an organization acknowledges certain risks, it takes proactive steps—such as implementing security controls, developing policies, or conducting training—to reduce these risks to an acceptable level. However, some level of risk typically persists, regardless of the controls in place, and this is what constitutes residual risk.

Understanding residual risk is crucial for risk management because it helps organizations recognize that complete elimination of risk is often not possible or practical. It allows organizations to make informed decisions about whether to accept, transfer, or further mitigate the remaining risk based on their risk tolerance and business objectives.

The other options focus on aspects of risk that do not reflect the concept of residual risk accurately. For instance, the risk eliminated through controls refers to the risk that has been mitigated, while the potential risk assessed without controls speaks to the initial identification of risks before any action has been taken. Lastly, the risk identified before any management action indicates pre-control risk, further distinguishing it from the residual risk concept.