Risk Audit vs Risk Review PMP: A Professional Guide to Clearing the Confusion

Within the domain of project management, effective risk management is paramount to achieving project objectives. As project professionals mature in their practice and prepare for credentials like the PMP certification, they encounter various processes and terminology. Two terms that frequently lead to confusion are “Risk Audit” and “Risk Review.” While both relate to evaluating project risks, they serve distinct purposes, occur at different times, and involve different parties.

A clear understanding of the difference between Risk Audits and Risk Reviews is crucial not only for excelling on the PMP exam but, more importantly, for implementing robust risk management practices in real-world projects. This guide aims to clarify these two vital processes from a professional, PMP-aligned perspective, addressing the common points of confusion.

Mastering risk is a key component of successful project delivery, as highlighted in our article, “5 Ways to Manage Risk and Maximize Rewards“. Understanding where Risk Audits and Risk Reviews fit into this broader picture is essential.

Understanding the Risk Review Process

A Risk Review is a recurring agenda item in project meetings (such as team meetings or status updates) or dedicated risk sessions. Its primary purpose is to examine the status of identified project risks and evaluate the effectiveness of implemented risk responses.

• Purpose: The core objectives of a Risk Review are to:
  • Ensure that previously identified risks are still relevant and their status is current.
  • Determine if the planned risk responses (like mitigation or contingency plans) are being effectively implemented.
  • Evaluate the effectiveness of the chosen risk responses in mitigating threats or capitalizing on opportunities.
  • Identify any new risks that may have emerged.
  • Close out risks that are no longer applicable.
• Timing: Risk Reviews are typically conducted regularly throughout the project lifecycle, often integrated into standard project status meetings or held in dedicated sessions at predetermined intervals (e.g., weekly, bi-weekly).
• Participants: Led by the Project Manager, Risk Reviews actively involve the project team, relevant stakeholders, and potentially risk owners.
• Outcome: Updated Risk Register, identification of new risks, adjustments to risk response plans, and revised risk statuses. This process ensures the project team remains aware of potential issues and opportunities and keeps the risk register a living document.

Think of a Risk Review as the project team regularly checking the pulse of their risks – are they still there? Are we doing what we said we would? Is it working? Have new concerns popped up? For insights into managing team interactions during these sessions, our post, “Ways To Communicate Effectively With Your Team When You Don’t Have Enough Time For Meetings“, could be helpful.

Understanding the Risk Audit Process

A Risk Audit, in contrast to a review, is a more formal examination. Its purpose is to assess the overall effectiveness of the risk management process being used on the project.

• Purpose: The main goals of a Risk Audit are to:
  • Evaluate the efficiency and effectiveness of the project’s risk management planning and execution against established organizational policies or best practices (like those outlined by PMI).
  • Determine if the risk management processes and tools being used are appropriate for the project’s size and complexity.
  • Identify lessons learned regarding the risk management process itself, which can benefit future projects.
  • Verify compliance with organizational or contractual risk management requirements.

• Timing: Risk Audits are typically scheduled at specific points in the project lifecycle, often milestones, or conducted periodically based on organizational policy. They are less frequent than Risk Reviews.
• Participants: Risk Audits are usually conducted by an independent party, such as the PMO, internal auditors, or an external consultant. While they interact with the project team and stakeholders, the audit is performed on the process, not by the process owners themselves. The Project Manager facilitates access to information but does not lead the audit.
• Outcome: Recommendations for improving the effectiveness and efficiency of the risk management process on the current project or for the organization’s future projects. Findings are documented and shared with relevant stakeholders and management.

Think of a Risk Audit as an independent check-up on how you are managing risks – are our methods sound? Are we following the rules? Is our overall process working as intended? This independent perspective is key.

Risk Audit vs Risk Review PMP: Key Distinctions

To summarize the critical differences, here is a comparison:

While both processes are vital components of comprehensive risk management, their roles are distinct: Risk Reviews are operational check-ins on specific risks, while Risk Audits are governance checks on the system of managing risks.

For a deeper dive into evaluating risks, our article on “Quantitative Risk Assessment: How to Quantify Risks in Project Management” provides further context on analyzing the impact and probability of identified risks within your overall risk management framework.

Why Understanding This Distinction Matters

Confusing Risk Audits and Risk Reviews can lead to gaps in your project’s risk management approach. Relying solely on reviews without periodic audits might mean you’re efficiently managing risks within a flawed process. Conversely, conducting audits without regular reviews means you lack visibility into the day-to-day status of critical risks.

For PMP aspirants, distinguishing these terms is often tested, as PMI emphasizes the importance of both the operational and governance aspects of project management processes. A strong understanding demonstrates a nuanced grasp of risk management principles, a core component of the Complete Guide to PMP Course Syllabus: What You’ll Learn.

Furthermore, incorporating robust risk practices, including knowing when and how to perform reviews and audits, is essential for preventing common pitfalls, as discussed in “Why Do Projects Fail? Avoid These 5 Common Mistakes“.

Conclusion: Both Processes are Essential for Robust Risk Management

In conclusion, while both Risk Audits and Risk Reviews are integral to effective project risk management, they serve fundamentally different purposes. Risk Reviews are operational activities performed regularly by the project team to monitor the status and effectiveness of responses for individual risks. Risk Audits are governance activities performed periodically by an independent party to evaluate the effectiveness and efficiency of the overall risk management process.

Successfully managing project risks requires leveraging both processes. Regular Risk Reviews keep the project team agile and responsive to emerging threats and opportunities, while periodic Risk Audits provide crucial oversight and drive continuous improvement in how risks are managed across the project or organization. Mastering this distinction enhances your capability as a project professional and solidifies your understanding of key PMP knowledge areas.

Deepen your expertise in Project Risk Management and other critical knowledge areas by exploring Shrilearning’s comprehensive PMP Certification Training Programs. Master the concepts essential for project success and certification.

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