How often should a risk assessment be conducted?

Conducting a risk assessment at least annually or when significant changes occur is vital for maintaining an organization’s risk management strategy. This approach ensures that the organization regularly evaluates its risk environment and updates its controls as necessary, accommodating new risks that may emerge or changes in existing risks.

An annual assessment establishes a consistent review cycle, which is essential in industries where regulations or market conditions frequently evolve. Furthermore, addressing significant changes — such as mergers, acquisitions, shifts in operational processes, or changes in technology — allows organizations to adapt their risk management strategies promptly to mitigate potential issues that could impact the organization’s objectives.

While frequent assessments may provide a comprehensive view of risks, the option of conducting them solely during financial audits limits their frequency, leaving the organization vulnerable to newly emerging risks outside of those audit periods. Similarly, conducting risk assessments every five years could result in outdated information, making it risky for the organization, as the dynamic nature of risks necessitates more regular evaluations.