What is the primary function of risk assessment?

The primary function of risk assessment is to identify and analyze potential risks that could impact an organization. This process is crucial as it enables organizations to understand various risks they may face, such as financial, operational, legal, or reputational risks. By identifying these risks, organizations can evaluate their potential impact and likelihood, which is essential for informed decision-making and strategic planning.

Understanding potential risks allows organizations to mitigate or manage them effectively, ensuring that they can continue to operate smoothly and protect their assets and stakeholders. This proactive approach involves collecting relevant data, analyzing the context of the organization, and evaluating internal and external factors that may contribute to risk exposure. Consequently, risk assessment serves as a foundational component of risk management strategies, which aim to enhance organizational resilience and sustainability.

In contrast, the other options do not reflect the primary objective of risk assessment. Eliminating all potential risks is typically unrealistic, as some risks are inherent to business operations. Developing a marketing strategy and increasing profits by taking more risks do not focus on identifying and analyzing risks, which is the core aspect of risk assessment.