What type of risk is defined as occurring within an organization?

The term "internal risk" specifically refers to risks that arise from within an organization itself, as opposed to factors outside of it. These risks can be attributed to various internal processes, systems, personnel, and policies. For example, they may include risks related to human resources, operational inefficiencies, technological failures, or poor organizational culture.

Internal risks are vital to manage because they can significantly affect the organization's ability to achieve its objectives. Understanding and addressing these risks is crucial for maintaining operational efficiency, ensuring compliance, and safeguarding the organization's resources and reputation.

In contrast, external risks arise from factors outside the organization, such as market changes, regulatory changes, and environmental conditions. Operational risk, a broader category, can include both internal and external elements. Financial risk is specifically related to the financial aspects of the organization, such as market fluctuations or credit risks, and does not encapsulate the full range of internal organizational risks. Therefore, "internal risk" is the precise term for risks that stem from within the organization.