Three Lines of Defense in terms of strengthening Asset Management with an Internal Control over

Financial Reporting (ICOFR) Approach

This paper analyzes how to apply the three lines of defense (3LD) to strengthen the implementation of
asset management at PT Pembangkitan Jawa-Bali (PJB). In essence, strengthening can be interpreted as
a process of continuous improvement. In managing the assets of a company, there are cycles that must
be carried out sequentially so that the final management process can function optimally. This cycle is
reflected in the presentation of the company's financial statements. The reliability of the presentation of
financial statements can be done by implementing Internal Control over Financial Reporting (ICOFR).

ICOFR is a process carried out by all members of the organization including the Commissioners,
Directors, Management and Employees in order to achieve adequate confidence in the achievement of
organizational goals, namely the reliability of financial reports. Utilizing the 3LD model, the
implementation of ICOFR has an increasingly significant impact in terms of internal control. Starting
from the implementation of Control Self-Assessment by First Line. Followed by a design test by the
second line. The last is the implementation of the operation effectiveness test by the third line

This paper shows that the implementation of 3LD with the ICOFR approach effectively and efficiently
supports the company's asset management as seen from the optimal planning, procurement and
inventory control and is clearly recorded in the financial statements.

In all of this, this paper provides an approach that links each line in the 3LD model to the best in asset
management with reliable financial reports.

Keyword: strengthening Asset Management, Three Lines of Defense, Internal control over financial
reporting (ICOFR), Control Self-Assessment, Test of Design, Test of Operating Effectiveness