Fundamentals of Risk Management

Appendix B
444
Term
Definition
reference
Risk response
Implementation of actions to respond to 
risks, including (for hazard risks) decisions 
whether to tolerate, treat, transfer or 
terminate (4Ts)
Table 15.1
Risk tolerance
Deviation from the expected level of risk 
leading to implementation of risk escalation 
procedures – definitions of risk tolerance 
can vary considerably
Chapter 25
Sarbanes–Oxley Act of 
2002
US legislation that encourages use of the 
COSO Internal Control framework (2013) to 
ensure that the information disclosed by 
companies listed by the SEC is accurate
Chapter 36
Severity
See ‘Magnitude’
Chapter 12
Significant risk
Risk with the ability to impact above the 
established benchmark for that type of risk
Table 12.1
Significant weakness
Weakness in controls in an organization 
with the potential to cause a significant or 
material loss
Chapter 34
Stakeholder
Persons or groups of persons with an 
interest in the activities of the organization, 
summarized by CSFSRS
Chapter 29
Strategic risk
Long-term or opportunity risk concerned 
with where the organization wants to go, 
how it plans to get there and how it can 
ensure survival
Chapter 19
Strategic, tactical, 
operational and
compliance (STOC)
Types of core processes that define the 
mission of the organization and its business 
model
Chapter 19
Strategy
Statement of where the organization wants 
to be in three or five years time, often 
defined by strategic objectives
Chapter 19
Tactical risk
Medium-term, control or uncertainty risk 
associated with change and projects 
designed to ensure that the organization 
delivers the planned strategy
Chapter 19

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