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Identification, evaluation, and mitigation of possible losses that can result from an organisation's noncompliance with laws, rules, standards, and internal and external policies and procedures is known as compliance risk management.

There are four primary methods for managing risks, sometimes known as risk treatment options:

1. Acceptance of risk
2. The transfer of risk
3. Risk reduction
4. Risk elimination

The observance of laws, rules, directives, and specifications pertinent to an organisation's business processes is referred to as regulatory compliance. Regulatory compliance violations frequently result in legal sanctions, including federal penalties.

Regulation is the process by which public sector organisations impose limits and limitations on specific activity.

Identification, assessment, and control of financial, legal, strategic, and security threats to the assets and profits of an organisation constitute the process of risk management.

Every business must take into account a variety of internal and external elements that have an impact on its ability to achieve or surpass its stated goals. Enterprise risk, a general term for this collection of variables, is the main cause of uncertainty in any firm. Today's business leaders are faced with a growing number of unanswered questions brought on by erratic economic conditions and radical innovation in a world that is changing quickly.

The term ‘systemic risk’ describes the possibility of a systemic failure as opposed to the failure of a single component. In a financial context, it refers to the possibility of a catastrophic economic slump brought on by a cascading financial sector failure brought on by connections inside the financial system.