Sensemaking is the process of continually observing and interpreting changes in an organization's internal context to understand their impact on operations, strategy, and performance.
Key Aspects of Sensemaking:
Observation: Identifies changes in processes, culture, or structure.
Interpretation: Evaluates how these changes affect the organization directly, indirectly, or cumulatively.
Why This is Important:
Sensemaking allows organizations to adapt effectively to evolving internal dynamics and maintain alignment with goals.
Why Other Options Are Incorrect:
A: Supply chain analysis focuses on a specific operational area, not the broader internal context.
B: While culture evaluation is part of sensemaking, it is not the entirety of the process.
C: Financial audits address compliance, not sensemaking.
Reference:
OCEG GRC Capability Model: Highlights sensemaking as essential for understanding internal context.
ISO 31000 (Risk Management): Discusses continuous assessment of internal factors.

TheSecond Linein theLines of Accountability Modelfocuses onoversight and supportfor the operational activities managed by the First Line.
* Establishing Programs:
* Second Line functions create risk management, compliance, and performance frameworks that guide the First Line in executing their responsibilities effectively.
* Providing Oversight:
* The Second Line monitors adherence to these frameworks and provides tools,policies, and standards to ensure alignment with organizational objectives and regulations.
* Examples of Second Line Roles:
* Compliance officers, risk managers, and internal control specialists.
References:
* COSO ERM and Lines of Defense Model: Defines the role of the Second Line in overseeing and guiding risk management and compliance processes.

Ongoing and periodic review activities are designed toevaluate the performance of actions and controlsin terms of their effectiveness, efficiency, responsiveness, and resilience.
* Purpose of Reviews:
* Effectiveness: Ensures objectives are being met.
* Efficiency: Confirms optimal use of resources.
* Responsiveness: Measures the speed of adaptation to changes or issues.
* Resilience: Assesses the ability to recover from disruptions.
* Why Other Options Are Incorrect:
* A: Reviews complement external audits, not replace them.
* B: Cost reduction may be a result but is not the primary purpose.
* D: Documentation for legal defenses is a secondary benefit, not the main goal.
References:
* COSO ERM Framework: Highlights the role of reviews in assessing risk management and control performance.
* OCEG GRC Capability Model: Recommends regular reviews for continuous improvement.