What does internal risk assessment evaluate?

Internal risk assessment evaluates risks based on internal operations, processes, and controls. This evaluation focuses on identifying potential vulnerabilities and threats within an organization that may arise from its own activities, systems, and procedures. By conducting an internal risk assessment, a company can uncover inefficiencies, compliance issues, or weaknesses in its operational processes that could lead to financial loss or reputational damage.

This thorough examination allows organizations to strengthen their risk management framework by ensuring that they manage the risks inherent in their specific operational setup. Through internal assessments, companies can develop strategies to mitigate these identified risks, thereby enhancing overall performance and resilience.

The context of the other options: external market conditions and global economic trends are typically evaluated in external risk assessments, while insurance policies relate more to risk transfer solutions rather than direct assessments of internal operations.