Week 6 - Three Lines of Defence Flashcards
(8 cards)
What do the three lines of defence refer to?
Controls
What is the first line of defence?
Management responsible for the area they look after and making sure that the controls are in place and working
Where is the first line of defence?
Within department of that company
What is the second line of defence?
Functions that oversee, monitor, and guide the management of risks and control across the organisation, but are not directly involved in operational activities
What are the first 3 examples of the second line of defence?
- risk-management committee
- normal security (physical things)
- inspection
What are the other 3 examples of the second line of defence?
- compliance
- quality
- financial control
What is the third line of defence?
Internal audit - making sure controls are working within company and risks are being managed
Where is the third line of defence?
Not part of any division - independent function
