Which document is essential for tracking risks and management strategies?

The risk register serves a critical function in the realm of risk management by systematically identifying, assessing, and managing risks associated with various aspects of an organization. This document not only lists potential risks but also tracks their status, the response strategies employed to mitigate them, and assigns responsibility for managing those risks to specific individuals or teams.

Using a risk register allows an organization to have a clear overview of its risk exposure and the measures in place to address those risks, facilitating better decision-making. It ensures that the organization is proactive rather than reactive in its approach to risk management, which is essential for maintaining operational integrity and safeguarding assets.

In comparison, financial statement analysis focuses more on understanding the financial health of an organization rather than identifying risks, a compliance report is aimed at ensuring adherence to laws and regulations without specifically focusing on risk management, and an audit report provides a review of financial practices but does not serve as a continuously updated tool for tracking risks.