Explain and describe each line of defense. Who is responsible in each line of defense?

The Three Lines of Defense model is a risk management strategy used by organizations. It divides the organization's functions into three categories or "lines of defense" against risks.

1. First Line of Defense - Operational Management: This is the first and most fundamental level of risk management. The first line of defense is the operational managers and staff who are responsible for maintaining the day-to-day operations of the organization. They are responsible for identifying, assessing, and managing risks within their own areas. They also implement corrective measures to address process and control deficiencies.

2. Second Line of Defense - Risk Management and Compliance Functions: This line of defense includes functions that oversee or specialize in risk management and compliance. They provide the policies, frameworks, and tools for the first line of defense to manage risk. They also monitor and report on the effectiveness of the first line of defense in managing its risks and implementing corrective actions.

3. Third Line of Defense - Internal Audit: The third line of defense is the internal audit function. They provide independent assurance to the board and senior management on the effectiveness of governance, risk management, and internal controls. They do this by assessing the effectiveness of the first and second lines of defense and reporting their findings directly to the board and senior management.

In summary, the first line of defense is responsible for managing risk, the second line of defense is responsible for monitoring and reporting on the management of risk, and the third line of defense is responsible for providing independent assurance on the management of risk.