Coordination Challenges in Implementing the Three Lines of Defense Model

39 Pages Posted: 10 Sep 2020

See all articles by Ulrich Bantleon

Ulrich Bantleon

Hochschule Offenburg

Anne Christine d'Arcy

Vienna University of Economics and Business

Marc Eulerich

University of Duisburg-Essen, Mercator School of Management

Anja Hucke

University of Rostock

Burkhard Pedell

University of Stuttgart

Nicole V.S. Ratzinger-Sakel

University of Hamburg

Date Written: July 30, 2020

Abstract

The Three Lines of Defense Model (TLoD) aims to provide a simple and effective way to improve coordination and enhance communications on risk management and control by clarifying the essential roles and duties of different governance functions. Without effective coordination of these governance functions, work can be duplicated or key risks may be missed or misjudged. To address these challenges, professional standards recommend that the Chief Audit Executive (CAE) coordinates activities with other internal and external governance stakeholders (assurance providers). We consider survey responses from 415 CAEs from Austria, Germany, and Switzerland to analyse determinants that help to implement the TLoD without any challenges and to explore the extent of (coordination) challenges between the internal audit function and the respective governance stakeholders. Our results show a great variance in the extent of coordination challenges dependent on different determinants and the respective governance stakeholder.

Keywords: Three Lines of Defense Model, Governance Framework, Internal Auditor, Internal Auditing Function, Chief Audit Executive, Combined Assurance

Suggested Citation

Bantleon, Ulrich and d'Arcy, Anne and Eulerich, Marc and Hucke, Anja and Pedell, Burkhard and Ratzinger-Sakel, Nicole V.S., Coordination Challenges in Implementing the Three Lines of Defense Model (July 30, 2020). Available at SSRN: https://ssrn.com/abstract=3663955 or http://dx.doi.org/10.2139/ssrn.3663955

Ulrich Bantleon

Hochschule Offenburg ( email )

Germany

Anne D'Arcy

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Marc Eulerich (Contact Author)

University of Duisburg-Essen, Mercator School of Management ( email )

Lotharstrasse 65
Duisburg, 47057
Germany
00492033792600 (Phone)

HOME PAGE: http://www.msm.uni-due.de/ircg

Anja Hucke

University of Rostock ( email )

Postfach 10 08 88
Rostock, 18055
Germany

Burkhard Pedell

University of Stuttgart ( email )

Keplerstraße 17
D-70174 Stuttgart
Germany

Nicole V.S. Ratzinger-Sakel

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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