Course code Ekon6040

Credit points 3

Risk Management Process

Total Hours in Course81

Number of hours for lectures12

Number of hours for seminars and practical classes12

Independent study hours57

Date of course confirmation19.02.2019

Responsible UnitInstitute of Economics and Finance

Course developer

author Ekonomikas un finanšu institūts

Romēna Šulca

Dr. oec.

Prior knowledge

Ekon5082, Financial Accounting I

Ekon5139, Economic Resources

Ekon5144, Enterpreneurship Financing

VadZ5046, Business Management

Course abstract

The study course provides detailed knowledge of the theoretical guidelines of the risk management process and its role in the corporate governance process, provides an in-depth understanding of risk classifications, risk forecasting, systematic identification and risk mitigation measures. Risk management techniques, techniques and a set of measures to prevent or reduce risks are used.

Learning outcomes and their assessment

Students will be able to:
1. Demonstrate an extended understanding of an effective risk management process and whether it is in line with the organisation’s mission and strategy. Independent work – specialised literature studies, a test.
2. Demonstrate an in-depth knowledge of risk identification and assessment, the kinds of risks, risk avoidance measures, risk appetite and risk management process supervision. Independent work – theses on how to solve particular problems, a test.
3. Independently apply risk management theory, reasonably discuss risk management in an organisation and four stages of an effective risk management process: risk identification, risk assessment, identification of risk management measures and risk supervision. Case studies, group work.
4. Independently analyse and assess each stage of the risk management process. Independent work – a report and a presentation on key theses.
5. Responsibly plan the completion of the assignments given. Independent work.
6. Select information and present the calculations performed and proposals made. Independent work.
7. Independently formulate and critically analyse the acquired theoretical knowledge and make a list of potential risks or a register of risks, in which it is specified for each risk: the risk area, the risk category, the name of the risk and a description of the risk, as well as calculate resources needed for risk avoidance. Two tests (multiple choice questions), a project report.

Course Content(Calendar)

1) Risk management process. Risk definitions, interpretations. Choice of risk management process methodology. Risk as an opportunity. Relationship between risk and return. Risk as danger or threat. Financial losses, fraud, theft, damaged reputation, errors in systems, litigation. Risk management tasks. Risk management processes: formal or informal; quantitatively or subjectively. Effectiveness of the risk management process: significant types of risks have been identified and assessed; selected risk prevention measures, risk appetite, risk information. Five main tasks of risk management processes. Latest developments, trends, industry information related to business. Company policy to determine the organization's business strategy, risk management principles and methodology, risk appetite and acceptable level of risk. Risk assessment reports. Risk monitoring activities. (lecture - 2 hours, practical work - 2 hours).
2) ISO 31000: 2009 - Risk management - Principles and guidelines (ISO 31000 standard). ISO 31000 standard: General guidelines, principles and guidelines (ISO 31000 standard). Ensuring risk management: principles, systems and processes. ISO 31000: A tool for an organization to manage risks effectively to identify opportunities and threats and to allocate and use resources effectively to reduce risks. ISO 31000 standard for decision making for small and medium enterprises. Risk management plan and different needs in the organization, its specific goals, tasks, structure, processes, functions, projects, products, services, assets and specific practices. (lecture - 2 hours, practical work - 2 hours).
3) Basic principles of risk management. 4 main stages of the risk management process: 1. Risk identification: various methods to ensure risk identification, formulations, descriptions, groupings according to certain features. Risk owner. 2. Risk assessment: a common assessment methodology, assigning a value to each risk that indicates the probability of occurrence of the risk and the magnitude of the impact. 3. Identification of risk management measures: depending on the vision of the institution's management and the results of the risk assessment. Risk prioritization. Risk prevention and monitoring measures. Likelihood of occurrence of risks and / or magnitude of impact. 4. Risk monitoring: frequency of risk monitoring, changes in the risk map, weaknesses in risk management, additional resources for risk mitigation. Organizational strategy for risk management depending on the specifics of the industry, customer base, weaknesses and strengths of the institution. The balance between the resources invested in risk management and the benefits of this instrument. (lecture - 2 hours, practical work - 2 hours).
4) Risk model and risk register. Risk management model-COSO. Risk areas and risk categories used for risk grouping. Optimal risk management measures and monitoring tools, division of responsibilities and duties. Risk formulation. Different approaches to risk identification. Formulation and documentation of information on risks: causes of risk, sources, types of manifestation, types and amounts of impact, indicators for measuring risk, etc. information. Documentation of risk information on paper or electronically. Use of risk information in further processes and decision making. Recognition of risks and the ability to manage them in the right way. Existing risk list or risk register: risk area, risk category; the name of the risk; description of risks. (lecture - 2 hours, practical work - 2 hours).
5) Risk identification methods. The essence of risk identification methods. Application of the survey method: for obtaining empirical primary information. Survey of experts. Structure diagram method: the role of company structure analysis in the risk identification process. Flowchart method: decision flow for a specific activity. A method of financial statement analysis for a more complete assessment of a company's financial position, profit or loss, changes in the structure of assets and liabilities. Management report analysis method. (lecture - 2 hours, practical work - 2 hours).

6) Risk assessment methods. The essence of risk assessment methods. Company risk portfolio. Risk action plan. Method of estimating the probability of an adverse event. Risk matrix method. Compiling a risk matrix: reflecting the interactions between the probabilities and impacts of the main identified risks. Hazard index method: assigning risk values or determining dimensions using the point system technique. Loss estimation method: calculation of the probability of occurrence of losses by analyzing all statistical data relevant to the performance of operations in the company. Grouping of risks into risk areas. (lecture - 2 hours, practical work - 2 hours).

Requirements for awarding credit points

Test with a mark. Accumulative assessment of study results. During the acquisition of the study course, two tests must be written (test-type): Test 1: Risk management process. Basic principles of risk management. Risk model and risk register. Test 2: Risk identification methods. Risk assessment methods. Prepare, submit and present a report - project "Company risk management model according to ISO 31000: 2009-Risk management - principles and guidelines".
Acquisition of the study course in distance learning is organized in accordance with the order of the Vice-Rector for Studies “On the procedure of e-studies at LLU”, a study course acquisition schedule is created for each semester. Students acquire the topics included in the study course independently, using the materials created and inserted by the lecturer in the e-learning environment Moodle. Feedback on the acquisition of topics in lectures and seminars in distance learning is organized in the form of self-examination tests, discussion forums and individual assignments, as well as face-to-face or online consultations, lectures and final examinations according to the schedule.

Description of the organization and tasks of students’ independent work

To master and strengthen the issues of theory, to study literature, to prepare for tests. Develop individual work and present it.

Criteria for Evaluating Learning Outcomes

All works must be completed during the semester. Cumulative assessment of study results (100%). 2 tests (30% + 30), report - project preparation and presentation (40%)

Compulsory reading

1. Aven T. Risk Analysis. University Stavanger, Norway. 2015.197 pp.
2. Hopkin P. Fundamentals of Risk Management. 5th Edition.UK, 2018, pp. 453.
3. Rodriguez E. Risk Analytics: Data-Driven Decisions under Uncertainty. CRC Press.2023. p. 469.
4. Sobel P.J., Reding K.F. Enterprise Risk Management: Achieving and Sustaining Success. The Institute of Internal Auditors Research Foundation. (IIARF). USA: Florida.2012. p. 225.

5. Sweeting P. Financial Enterprise risk management. Second Edition. Cambridge University Press, UK. 2017. p.601.

Further reading

1. Risku vadības ieviešanas rokasgrāmata. Pieejams:
2. Risk in Focus 2024: Hot topics for internal auditors
3. 09/2023. Pieejams:
4. Robinson T., et al International Financial Statement Analysis (CFA Institute Investment Series), 4 th Edition. Hoboken, New Jersey: John Wiley & Sons Inc., 2020. p. 978.
5. Šturca E. Risku vadības pievienotā vērtība stratēģijas plānošanā un īstenošanā. KPMG Baltics AS, 2021, 15 lpp. Pieejams:

6. Welc J. Evaluating Corporate Financial Performance: Tools and Applications. Switzerland AG: Springer Nature, 2022.p. 324.

Periodicals and other sources

1. ISO 31000:2018 - Risk management A practical guide. Pieejams:
2. PwC 2022 Global Digital Trust Insights Survey. Pieejams:

3. Riski valsts pārvaldes iestādē. Informatīvs materiāls iekšējiem auditoriem. Iekšējo auditoru institūts. (2012), 16 lpp. Pieejams:


Compulsory study course for ESAF academic master's study programme "Economics", restricted elective study course for ESAF academic master's study programme "Sociology of Organizations and Public Administration", optional study course for professional master's study program "Business Management"