Optimising financial processes

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Something to Consider: Management is a Game of “Offense” (Attack) as Well as “Defence”!

Something to Consider July 2020 4

As you may be aware, The Institute of Internal Auditors (IIA) have released a revised and evolved “3 Lines”.

We all represent one of these lines in this model of management.

Originally focused on risk management and assurance, the model is no longer just about “defense” (or “defence” depending on which side of the Atlantic you are), but about creating value by managing objectives, navigating both risk and opportunity, as a collaborative endeavor (endeavour) and incorporating the key management concept of “risk informed decision making”.

The new Three Lines model clearly delineates roles and responsibilities of the governing body (The Board), as well as executive management, operational leaders and internal audit. These roles are not limited to risk management but focus on the overall governance of journey of the organisation towards it’s objectives.

But some have argued that there needs to be much clearer boundaries for audit to ensure its independence and the objectivity of its staff. However, the refreshed model clearly emphasises that “independence does not imply isolation”, encouraging collaboration and communication across the lines.

You can find the new guidance here and we have been reading expert opinions on this latest update to the model. Richard Chambers, which you can find here, and Norman Marks, which you can find here.
Let us know your thoughts and your opinion on the debate.
Our ‘Something To Consider’ snippets are framed as small, digestible, ‘dashes of insight’ around the pillars of what we define as “World Class Finance” – Process Optimization, Financial Control and Compliance, and Risk Assurance, all underpinned by technology enablement and integration.