What is the purpose of a risk register?

The purpose of a risk register is to centralize records of risks and their management. A risk register serves as a comprehensive tool where all identified risks related to a project or organization are documented, along with details such as the nature of the risk, its potential impact, likelihood of occurrence, mitigation strategies, and responsibilities for managing those risks. This centralization enables effective monitoring and management of risks throughout the project's lifecycle, ensuring that stakeholders have a clear understanding of both the risks involved and the strategies to address them.

Having a well-maintained risk register helps in prioritizing risks based on their severity and likelihood, facilitating informed decision-making and resource allocation. It also promotes transparency among team members and stakeholders, as it provides a single source of truth regarding the organization's risk exposure and the actions being taken to mitigate those risks.

In contrast, the other options focus on unrelated functions: documenting financial transactions pertains to accounting, tracking employee performance relates to human resources management, and analyzing market trends is associated with market research and business strategy, thus illustrating the specific and foundational role of a risk register within risk management practices.