Which of the following best describes residual risk?

Residual risk is best described as the risk that remains after risk mitigation measures have been applied. This is a fundamental concept in risk management, emphasizing that while organizations implement controls and strategies to reduce risks, some level of risk usually still exists. This remaining risk must be acknowledged and managed accordingly, as it can still impact the organization despite the precautions taken.

In contrast, the initial risk before any controls focuses on the total risk landscape prior to any interventions, which does not take into account the effectiveness of risk management strategies. The concept of residual risk specifically arises after these measures have been enacted and is critical for understanding the ongoing vulnerabilities that a business may face.

Accounting for risks in incident reports is connected to documenting what has occurred but does not directly define residual risk. Additionally, the notion that risk can be entirely avoided is not aligned with reality; some risks are inherent to business operations and cannot be eliminated entirely, only mitigated or transferred. Therefore, recognizing residual risk is crucial for ongoing risk management and planning, allowing for better strategies and response initiatives.