Updated: Nov 6, 2020
IIA updates defense model
On the 20th July, The Institute of Internal Auditors released its updated Three Lines of Defense Model. The new three lines model is essentially an updated version for the well known and understood four line model. The change in the model is to not only simplify processes, but also better reflect current business arrangements and to emphasise more active forms of risk management and governance that go beyond merely defensive moves by the internal audit function.
The new model discusses the roles of various leaders within an organisation, including oversight by a board or governing body; management and operational leaders, including risk and compliance (the first and second lines) and independent assurance through internal audit (the third line). It also deals with the role of external assurance providers. The model is designed so that it can apply to all types of organisations of different sizes and complexities. Depending on the size and maturity of the organisation, and how well established the audit function is, there may be differences in the extent to which the model is applied.
As per the The Three Lines Model guide released by the IIA, the new model helps organisations identify structures and processes that best assist the achievement of objectives and facilitate strong governance and risk management. The model applies to all organizations and is optimised by:
Adopting a principles-based approach and adapting the model to suit organizational objectives and circumstances.
Focusing on the contribution risk management makes to achieving objectives and creating value, as well as to matters of “defense” and protecting value.
Clearly understanding the roles and responsibilities represented in the model and the relationships among them.
Implementing measures to ensure activities and objectives are aligned with the prioritized interests of stakeholders.
You can view a copy of the new Three Lines Model here.
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