Risk assessment is an important, yet difficult, step in the risk management process. Once risks have been identified and assessed, the steps to properly deal with these risks are more formulaic.
Part of the difficulty of risk management is that measurement of both of the quantities in which risk assessment is concerned- potential loss and probability of occurrence- can be very difficult to measure. The chance of error in the measurement of these two concepts is large. A risk with a large potential loss and a low probability of occurring is often treated differently from one with a low potential loss and a high likelihood of occurring.
In theory, both are of nearly equal priority in dealing with first, but in practice it can be very difficult to manage when faced with the scarcity of resources, especially time, in which to conduct the risk management process.
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