Certified Governance Risk and Compliance (CGRC) Practice Exam 2026 – All-in-One Guide to Master Your Certification!

The initial phase of a risk management process is risk identification. This step is crucial as it sets the foundation for understanding the types of risks that could potentially impact an organization. During this stage, the organization systematically examines internal and external factors that might pose risks, including operational, financial, strategic, and compliance-related risks.

Effective risk identification involves gathering data from various sources, engaging stakeholders, and utilizing tools and techniques to pinpoint risks before they can affect the organization's objectives. By identifying risks early on, organizations can then move on to assessing their significance, planning responses, and establishing monitoring mechanisms.

In contrast, while risk assessment, response planning, and monitoring are all integral parts of the overall risk management process, they follow the identification of risks. Without a comprehensive understanding of what risks exist, it would be challenging to evaluate their impact or develop effective strategies to manage them.