Fundamentals of Risk Management

Risk assurance
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TAbLE
 35.2
Allocation of responsibilities
internal audit activities
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giving assurance on risk management processes
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giving assurance that risks are correctly evaluated
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evaluating risk management processes
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evaluating the reporting of key risks
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reviewing the management of key risks
risk management support
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facilitating identification and evaluation of risks
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coaching management in responding to risks
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co-ordinating ERM activities
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consolidated reporting on risks
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maintaining and developing the ERM framework
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championing establishment of ERM
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developing RM strategy for board approval
Management responsibilities
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setting the risk appetite
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imposing risk management processes
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management assurance on risks
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taking decisions on risk responses
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implementing risk responses on behalf of management
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accountability for risk management
Five lines of assurance
There has been considerable discussion about the operation of the three lines of
defence model. For example, an organization that has adopted this approach will 
need to consider where head office functions operate within the three lines, as they 
will often undertake activities that are first- and/or second-line activities and, poten-
tially, operate as third-line as well.
Specifically, the treasury function within the head office of a large company will 
manage the treasury requirements of the organization as first-line managers. Addition-
ally, the treasury function will be an area of expertise that decides the strategy and 

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