In the three lines of defense model, what is the focus of the third line?

The focus of the third line of defense in the three lines of defense model is internal audit and independent assurance. This line is critical because it provides an objective and independent evaluation of the effectiveness of the organization’s risk management, control, and governance processes.

The internal audit function is tasked with assessing not only compliance with established policies and procedures but also the adequacy of risk management strategies and controls implemented by the first and second lines of defense. By conducting audits and generating reports, this line ensures that any weaknesses identified are addressed, ultimately enhancing the overall governance framework and organizational resilience against risks.

This independent assurance role is crucial for establishing trust with stakeholders, including regulators and external parties, as it provides them with confidence in the integrity and reliability of the organization’s risk management and control systems. Hence, the focus of the third line is integral to the overall success of effective risk management in an organization.