What are Risk Indicators used for in the context of risk management?

Risk Indicators serve a critical function in risk management by providing a quantitative or qualitative measure that helps organizations assess their risk performance. These indicators allow organizations to track and monitor how well they are managing risks over time. By measuring aspects such as the frequency of incidents, compliance levels, or operational losses, organizations can determine whether their risk management strategies are effective or if adjustments are needed.

Using Risk Indicators helps stakeholders make informed decisions about risk exposure and allows for proactive management by identifying trends or patterns that might indicate a shift in risk levels. This ongoing evaluation is crucial as it supports continuous improvement in risk management practices, ensuring that risks are effectively monitored and managed.

The other options, while relevant to risk management, do not align with the primary purpose of Risk Indicators. They focus on aspects like notifying users of assessments or evaluating control effectiveness, which are important but not the core function of Risk Indicators. Identifying potential risks is more about the initial risk assessment phase, rather than the ongoing monitoring that Risk Indicators facilitate.