Information Systems Controls for System Reliability

8/3/2019 Information Systems Controls for System Reliability

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CHAPTER 8

Information Systems Controls forSystem Reliability

Part 2: Confidentiality, Privacy,

Processing Integrity, and Availability


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INTRODUCTION

Questions to be addressed in this chapter

include:

What controls are used to protect theconfidentiality of sensitive information?

What controls are designed to protect privacy of

customers personal information?

What controls ensure processing integrity?

What controls ensure that the system is available

when needed?


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INTRODUCTION

According to the Trust

Services framework, reliable

systems satisfy five principles:

Security (discussed in Chapter

7)

Confidentiality

Privacy

Processing integrity

Availability

SECURITY

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IDENTIALITY

PRIVACY

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CONFIDENTIALITY

y Reliable systems protect

confidential information

from unauthorized

disclosure.

SECURITY

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IDENTIALITY

PRIVACY

PROCES

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AVAILABILITY

SYSTEMSRELIABILITY


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CONFIDENTIALITY

Maintaining confidentiality requires that managementidentify which information is confidential.

Confidential information includes sensitive data producedinternally as well as that shared by business partners.

Each organization will develop its own definitions.

Most definitions will include:

Business plans

Pricing strategies

Client and customer lists Legal documents


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CONFIDENTIALITY

y Table 8-1 in your textbook summaries key controls to

protect confidentiality of information:

Situation Controls

Storage Encryption and access controls

Transmission Encryption

Disposal Shredding, thorough erasure, physical

destruction

Overall Categorization to reflect value and training

in proper work practices


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CONFIDENTIALITY

Encryption is a fundamental control procedure for

protecting the confidentiality of sensitive

information.

Confidential information should be encrypted:

While stored

During transmission to trusted parties


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CONFIDENTIALITY

The internet provides inexpensive transmission, but

data is easily intercepted.

Encryption solves the interception issue.

If data is encrypted before sending it, a virtual

private network (VPN) is created.

Provides the functionality of a privately owned network

But uses the Internet


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CONFIDENTIALITY

Use of VPN software creates private communication

channels, often referred to as tunnels.

The tunnels are accessible only to parties who have the

appropriate encryption and decryption keys.

Cost of the VPN software is much less than costs of leasing

or buying a privately-owned, secure communications

network.

Also, makes it much easier to add or remove sites from thenetwork.


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CONFIDENTIALITY

It is critical to encrypt any sensitive information

stored in devices that are easily lost or stolen, such

as laptops, PDAs, cell phones, and other portable

devices. Many organizations have policies against storing sensitive

information on these devices.

81% of users admit they do so anyway.


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CONFIDENTIALITY

Encryption alone is not sufficient to protect confidentiality.Given enough time, many encryption schemes can be broken.

Access controls are also needed:

To prevent unauthorized parties from obtaining the encrypted data;

and

Because not all confidential information can be encrypted in storage.

Strong authentication techniques are necessary.

Strong authorization controls should be used to limit theactions (read, write, change, delete, copy, etc.) thatauthorized users can perform when accessing confidentialinformation.


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CONFIDENTIALITY

Access to system outputs should also be controlled:

Do not allow visitors to roam through buildings unsupervised.

Require employees to log out of any application before leaving theirworkstation unattended, so other employees do not have

unauthorized access. Workstations should use password-protected screen savers that

automatically engage when there is no activity for a specified period.

Access should be restricted to rooms housing printers and faxmachines.

Reports should be coded to reflect the importance of the information

therein, and employees should be trained not to leave reports withsensitive information laying in plain view.


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CONFIDENTIALITY

It is especially important to control disposal of

information resources.

Printed reports and microfilm with sensitiveinformation should be shredded.


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CONFIDENTIALITY

Special procedures are needed for information stored onmagnet and optical media.

Using built-in operating system commands to delete the informationdoes not truly delete it, and utility programs will often be able to

recover these files. De-fragmenting a disk may actually create multiple copies of a

deleted document.

Consequently, special software should be used to wipe the mediaclean by repeatedly overwriting the disk with random patterns of data(sometimes referred to as shredding a disk).

Magnetic disks and tapes can be run through devices to demagnetizethem.

The safest alternative may be to physically destroy disks with highlysensitive data.


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CONFIDENTIALITY

Controls to protect confidentiality must becontinuously reviewed and modified to respond tonew threats created by technological advances.

Many organizations now prohibit visitors from usingcell phones while touring their facilities because ofthe threat caused by cameras in these phones.

Because these devices are easy to hide, someorganizations use jamming devices to deactivate

their imaging systems while on company premises.


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CONFIDENTIALITY

Phone conversations have also been affected by

technology.

The use of voice-over-the-Internet (VoIP) technology

means that phone conversations are routed in

packets over the Internet.

Because this technology makes wiretapping much easier,

these packets should be encrypted.


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CONFIDENTIALITY

Employee use of email and instant messaging (IM)probably represents two of the greatest threats tothe confidentiality of sensitive information.

Once sent, there is no way to retrieve or control itsdistribution.

Organizations need to develop comprehensive policiesgoverning the appropriate and allowable use of thesetechnologies for business purposes.

Employees need to be trained on what type of informationthey can and cannot share, especially with IM.


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CONFIDENTIALITY

Many organizations are taking steps to address theconfidentiality threats created by email and IM.

One response is to mandate encryption of all email withsensitive information.

Some organizations prohibit use of freeware IM productsand purchase commercial products with security features,including encryption.

Users sending emails must be trained to be very careful

about the identity of their addressee. EXAMPLE: The organization may have two employees named

Allen Smith. Its critical that sensitive information go to the correctAllen Smith.


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PRIVACY

In the Trust Servicesframework, the privacyprinciple is closely related tothe confidentiality principle.

Primary difference is thatprivacy focuses on protectingpersonal information aboutcustomers rather thanorganizational data.

Key controls for privacy are thesame that were previouslylisted for confidentiality.

SECURITY

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PRIVACY

A number of regulations, including the Health

Insurance Portability and Accountability Act (HIPAA)

and the Financial Services Modernization Act (aka,

Gramm-Leach-Billey Act) require organizations toprotect the privacy of customer information.


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PRIVACY

The Trust Services privacy framework of the AICPA and CICA

lists ten internationally recognized best practices for

protecting the privacy of customers personal information:

Management

The organization establishes a set of proceduresand policies for protecting privacy of personalinformation it collects.

Assigns responsibility and accountability forthose policies to a specific person or group.


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PRIVACY




Management

Notice

Provides notice about its policies and practiceswhen it collects the information or as soon as

practicable thereafter.


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PRIVACY




Management

Notice

Choice and consent

Describes the choices available toindividuals and obtains their consentto the collection and use of their

personal information. Choices may differ across countries.

U.S.The default is opt out, i.e.,organizations can collect personalinformation about customers

unless the customer explicitlyobjects.

EuropeThe default is opt in,i.e., they cant collect theinformation unless customersexplicitly give them permission.

Collection

The organization collects only thatinformation needed to fulfill thepurposes stated in its privacypolicies.


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PRIVACY




Management

Notice

Choice and consent

Collection

The organization collects only thatinformation needed to fulfill thepurposes stated in its privacy policies.


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PRIVACY




Management

Notice

Choice and consent

Collection

Use and retention

The organization uses its customerspersonal information only accordingto stated policy and retains thatinformation only as long as needed.


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PRIVACY




Management

Notice

Choice and consent

Collection

Use and retention

Access The organization provides individuals

with the ability to access, review,correct, and delete the personalinformation stored about them.


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PRIVACY




Management

Notice

Choice and consent

Collection

Use and retention

Access

Disclosure to Third Parties

The organization discloses customerspersonal information to third partiesonly per stated policy and only to thirdparties who provide equivalent

protection.


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PRIVACY




Management

Notice

Choice and consent

Collection

Use and retention

Access


Security

The organization takes reasonable steps to protect customerspersonal information from loss or unauthorized disclosure.

Issues that are sometimes overlooked:

Disposal of computer equipment

Should follow the suggestions presented on section regardingprotection of confidentiality.

Email

If you send emails to a list of recipients, each recipienttypically knows who the other recipients are.

If the email regards a private issue, e.g., perhaps it pertains totheir AIDS treatment, then the privacy of all recipients hasbeen violated.

One remedy might be to address the recipients on the bccline of the email, rather than as original addresses.

Release of electronic documents.

When physical documents are exchanged, sometimesportions are blacked out (redacted) to protect privacy.

Similar procedures are needed for the exchange of electronicdocuments.


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PRIVACY

The Trust Services privacy framework of the AICPA and CICA lists ten

internationally recognized best practices for protecting the privacy

of customers personal information:

Management

Notice

Choice and consent

Collection

Use and retention

Access


Security

Quality

The organization maintains theintegrity of its customers personalinformation.


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PRIVACY

The Trust Services privacy framework of the AICPA and CICA lists ten

internationally recognized best practices for protecting the privacy

of customers personal information:

Management

Notice

Choice and consent

Collection

Use and retention

Access


Security

Quality

Monitoring and enforcement

The organization assigns one or moreemployees to be responsible forassuring and verifying compliancewith its stated policies.

Also provides for procedures torespond to customer complaints,including third-party dispute-resolution processes.


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PRIVACY

As with confidentiality, encryption and access

controls are the two basic mechanisms for protecting

consumers personal information.

It is common practice to use SSL to encrypt all personalinformation transmitted between individuals and the

organizations website.

However, SSL only protects the information in transit.

Consequently, strong authentication controls are neededto restrict website visitors access to individual accounts.


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PRIVACY

Organizations should consider encrypting

customers personal information in storage.

May be economically justified, because some state

laws require companies to notify all customers of

security incidents.

The notification process is costly but may be

waived if the information was encrypted while instorage.


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PRIVACY

Concerns about privacy appear to be increasing. Onetopic of concern is cookies.

A cookie is a text file created by a website and stored on avisitors hard drive. It records what the visitor has done onthe site.

Most websites create multiple cookies per visit to make iteasier for visitors to navigate the site.

Browsers can be configured to refuse cookies, but it may

make the website inaccessible. Cookies are text files and cannot do anything other store

information, but many people worry that they violateprivacy rights.


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PRIVACY

A related concern involves the overwhelming

volume of spam.

Spam is unsolicited email that contains either

advertising or offensive content.

Reduces the efficiency benefits of email.

Is a source of many viruses, worms, spyware, and other

malicious content.


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PRIVACY

In 2003, the U.S. Congress passed the Controlling the

Assault of Non-Solicited Pornography and

Marketing (CAN-SPAM) Act.

Provides criminal and civil penalties for violation of thelaw.

Applies to commercial email, which is any email with a

primary purpose of advertising or promotion.

Covers most legitimate email sent by organizations tocustomers, suppliers, or donors to non-profits.


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PRIVACY

Consequently, organizations must carefully follow the CAN-

SPAM guidelines, which include:

The senders identity must be clearly displayed in the message

header.


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PRIVACY



The senders identity must be clearly displayed in the message header.

The subject field in the header must clearly identify the message as

an advertisement or solicitation.


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PRIVACY




The subject field in the header must clearly identify the message as an

advertisement or solicitation.

The body must provide recipients with a working link that can be

used to opt out of future email.

Organizations have 10 days after receipt of an opt outrequest to ensure they do not send additionalunsolicited email to that address.

Means someone must be assigned responsibility forprocessing these requests.


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PRIVACY






The body must provide recipients with a working link that can be used

to opt out of future email.

The body must include the senders valid postal address.

Best practice (not required) would be to provide fullstreet address, telephone, and fax numbers.


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PRIVACY






The body must provide recipients with a working link that can be used

to opt out of future email.

The body must include the senders valid postal address.

Organizations should not:

Send email to randomly generated addresses.

Set up websites designed toharvest email addresses of potential

customers.


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PRIVACY

Experts recommend that organizations redesign their

own websites to include a visible means for visitors

to opt in to receive email.

The AICPA and CICA have developed a privacyframework that provides detailed information on

how organizations can comply with CAN-SPAM and

other domestic and international regulations.


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PRIVACY

Organizations need to train employees on how to

manage personal information collected from

customers.

Especially important for medical and financial information.

Intentional misuse or unauthorized disclosure can have

serious economic consequences, including:

Drop in stock price

Significant lawsuits Government suspension of the organizations business activity


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PRIVACY

Another privacy-related issue that is of growing

concern is identity theft.

Organizations have an ethical and moral obligation to

implement controls to protect databases that contain theircustomers personal information.


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PRIVACY

Steps that individuals can take to minimize the risk of

becoming a victim of identity theft include:

Shred all documents that contain personal information, especially

unsolicited credit card offers. Cross-cut shredders are more effective.

Never send personally identifying information in unencrypted email.

Beware of email, phone, and print requests to verify personal

information that the requesting party should already possess.

Credit card companies wont ask for your security code.

The IRS wont email you for identifying information in response to

an audit.


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PRIVACY

Do not carry your social security card with you or comply with

requests to reveal the last 4 digits.

Limit the amount of identifying information preprinted on

checks and consider eliminating it.

Do not place outgoing mail with checks or personal information

in your mailbox for pickup.

Dont carry more than a few blank checks with you.

Use special software to thoroughly clean any digital media

before disposal, or physically destroy the media. It is especiallyimportant to thoroughly erase or destroy hard drives before

donating or disposing of equipment.


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PRIVACY

Monitor your credit reports regularly.

File a police report as soon as you discover that your purse or

wallet was stolen.

Make photocopies of drivers licenses, passports, and credit

cards. Store them with phone numbers for all the credit cards in

a safe location to facilitate notifying authorities if they are

stolen.

Immediately cancel any lost or stolen credit cards.


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PROCESSING INTEGRITY

A reliable system producesinformation that is accurate,timely, reflects results of onlyauthorized transactions, and

includes outcomes of allactivities engaged in by theorganization during a givenperiod of time.

Requires controls over both

data input quality and theprocessing of the data.

SECURITY

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Five categories of integrity controls are

designed to meet the preceding objectives:

Source data controls

Data entry controls

Processing controls

Data transmission controls

Output controls


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Data entry controls

Processing controls


Output controls


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Source Data Controls

If the data entered into a system is inaccurate or

incomplete, the output will be, too. (Garbage in garbage

out.) Companies must establish control procedures to ensure

that all source documents are authorized, accurate,

complete, properly accounted for, and entered into the

system or sent to their intended destination in a timely

manner.


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The following source data controls regulate integrity

of input:

Forms design

Source documents and other forms should bedesigned to help ensure that errors and omissionsare minimized (Chapter 18).


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of input:

Forms design

Pre-numbered forms sequence test Pre-numbering helps verify that no items are

missing.

When sequentially pre-numbered source datadocuments are used, the system should be

programmed to identify and report missing orduplicate form numbers.


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of input:

Forms design

Pre-numbered forms sequence test Turnaround documents

Documents sent to external parties that are preparedin machine-readable form to facilitate theirsubsequent processing as input records.

Example: the stub that is returned by a customerwhen paying a utility bill.

Are more accurate than manually-prepared inputrecords.


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of input:

Forms design


Cancellation and storage of documents

Documents that have been entered should becanceled

Paper documents are stamped paid orotherwise defaced

A flag field is set on electronic documents.

Canceling documents does not mean destroyingdocuments.

They should be retained as long as needed to satisfylegal and regulatory requirements.


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of input:

Forms design



Authorization and segregation of duties

Source documents should be prepared only byauthorized personnel acting within their authority.

Employees who authorize documents should not beassigned incompatible functions.


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of input:

Forms design




Visual scanning

Documents should be scanned for reasonablenessand propriety.


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of input:

Forms design




Visual scanning

Check digit verification

An additional digit called a check digit can beappended to account numbers, policy numbers, IDnumbers, etc.

Data entry devices then perform check digitverification by using the original digits in the numberto recalculate the check digit.

If the recalculated check digit does not match thedigit recorded on the source document, that resultsuggests that an error was made in recording or

entering the number.


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of input:

Forms design




Visual scanning

Check digit verification

RFID security

Many businesses are replacing bar codes and manualtags with radio frequency identification (RFID) tagsthat can store up to 128 bytes of data.

These tags should be write-protected so thatunscrupulous customers cannot change priceinformation on merchandise.


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Data entry controls

Processing controls


Output controls


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Once data is collected, data entry control procedures are

needed to ensure that its entered correctly. Common tests to

validate input include:

Field check

Determines if the characters in a field are of theproper type.

Example: The characters in a social security fieldshould all be numeric.


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Field check

Sign check

Determines if the data in a field have the appropriatearithmetic sign.

Example: The number of hours a student is enrolled

in during a semester could not be a negative number.


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Field check

Sign check

Limit check

Tests whether an amount exceeds a predeterminedvalue.

Example: A university might use a limit check tomake sure that the hours a student is enrolled in donot exceed 21.


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Field check

Sign check

Limit check

Range check

Similar to a field check, but it checks both ends of a

range. Example: Perhaps a wage rate is checked to ensure

that it does not exceed $15 and is not lower than theminimum wage rate.


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Field check

Sign check

Limit check

Range check

Size (or capacity) check

Comp

leteness c

heck

Determines if all required items have been entered.

Example: Has the students billing address beenentered along with enrollment details?


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Field check

Sign check

Limit check

Range check


Completeness check Validity check

Compares the value entered to a file of acceptablevalues.

Example: Does the state code entered for an address

match one of the 50 valid state codes?


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Field check

Sign check

Limit check

Range check


Completeness check Validity check

Reasonableness test

Determines whether a logical relationship seems tobe correct.

Example: A freshman with annual financial aid of$60,000 is probably not reasonable.


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The preceding tests are used for batch

processing and online real-time processing.

Both processing approaches also have some

additional controls that are unique to each

approach.


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Additional Batch Processing Data Entry

Controls

In addition to the preceding controls, when using

batch processing, the following data entry controls

should be incorporated.

Sequence check

Tests whether the data is in the proper numerical or

alphabetical sequence.


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Controls




Sequence check

Error log

Records information about data input or processing

errors (when they occurred, cause, when they werecorrected and resubmitted).

Errors should be investigated, corrected, andresubmitted on a timely basis (usually with the nextbatch) and subjected to the same input validationroutines.

The log should be reviewed periodically to ensurethat all errors have been corrected and then used toprepare an error report, summarizing errors by recordtype, error type, cause, and disposition.


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Controls




Sequence check

Error log

Batch totals

Summarize key values for a batch of input records.

Commonly used batch totals include: Financial totalssums of fields that contain dollar

values, such as total sales.

Hash totalssums of nonfinancial fields, such asthe sum of all social security numbers ofemployees being paid.

Record countcount of the number of records ina batch.

These batch totals are calculated and recorded whendata is entered and used later to verify that all inputwas processed correctly.


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Additionalonline data entry controls

Online processing data entry controls include:

Automatic entry of data

Whenever possible, the system should automaticallyenter transaction data, such as next availabledocument number or new ID number.

Saves keying time and reduces errors.


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Prompting

System requests each input item and waits for anacceptable response.


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Prompting

Pre-formatting

Fields that need to be completed are highlighted.


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Prompting

Pre-formatting

Closed-loop verification

Checks accuracy of input data by retrieving related

information. Example: When a customers account number is

entered, the associated customers name is displayedon the screen so the user can verify that entries arebeing made for the correct account.

Maintains a detailed record of all transaction data


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Prompting

Pre-formatting


Transaction logs

Maintains a detailed record of all transaction data,including:

A unique transaction identifier

Date and time of entry Terminal from which entry is made

Transmission line

Operator identification

Sequence in which transaction is entered

The log can be used to reconstruct a file that isdamaged or can be used to ensure transactions arenot lost or entered twice if a malfunction shuts downthe system.


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Prompting

Pre-formatting


Transaction logs

Error messages

Should indicate when an error occurred, which item,and how it should be corrected.


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Data entry controls

Processing controls


Output controls


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Processing Controls

Processing controls to ensure that data is

processed correctly include:

Data matching

Two or more items must match before processingcan proceed.

Example: The quantity billed on the vendor invoicemust match the quantity ordered on the purchaseorder and the quantity received on the receivingreport.


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Processing Controls



Data matching

File labels

External labels should be checked visually to ensure the correct andmost current files are being updated.

There are also two important types of internal labels to be checked. The header record, located at the beginning of each file, contains

the file name, expiration date, and other identification data.

The trailer record at the end of the file contains the batch totalscalculated during input.

Batch totals should be recomputed as processing takes place.


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Processing Controls



Data matching

File labels

Recalculation of batch totals

Batch totals should be recomputed as processing takes place.

These totals should be compared to the totals in the trailer record.

Discrepancies indicate processing errors, such as:

If the recomputed record count is smaller than the original count,one or more records were not processed.

If the recomputed record count is larger than the original, thenadditional unauthorized transactions were processed or someauthorized transactions were processed twice.

If the discrepancy between totals is evenly divisible by 9, therewas probably a transposition error (two adjacent digits werereversed).


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Processing Controls



Data matching

File labels


Cross-footing balance test

Compares arithmetic results produced by two differentmethods to verify accuracy.

EXAMPLE: Compute the sum of column totals in aspreadsheet and compare it to a sum of the row totals.


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Processing Controls



Data matching

File labels



Write-protection mechanisms

Protect against accidental writing over or erasing ofdata files but are not foolproof.


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Processing Controls



Data matching

File labels




Database processing integrity procedures

Database systems use database administrators, datadictionaries, and concurrent update controls toensure processing integrity.

The administrator establishes and enforcesprocedures for accessing and updating the database.

The data dictionary ensures that data items aredefined and used consistently.

Concurrent update controls protect records frombeing updated by two users simultaneously.

Locks one user out until the other has finishedprocessing.


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Processing Controls



Data matching

File labels




Database processing integrity procedures

Data conversion controls

When changing systems, data from old files and

databases are entered into new data structures. Conversion controls help ensure that the new data

storage media are free of errors.

Old and new systems should be run in parallel atleast once and results compared to identify

discrepancies. Internal auditors should review data conversion

processes for accuracy.


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Data entry controls

Processing controls


Output controls


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Data Transmission Controls

In addition to using encryption to protect the confidentiality of

information being transmitted, organizations need controls to

minimize the risk of data transmission errors.

When the receiving unit detects a data transmission error, it asks thesending unit to re-send. Usually done automatically.

Sometimes, the system may not be able to accomplish automatic

resubmission and will ask the sender to re-transmit the data.

Two basic types of data transmission controls:

Parity checking

Message acknowledgment techniques


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Parity checking



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Parity checking

Computers represent characters as a set of binary digits

(bits).

For example, 5 is represented by the seven-bit pattern0000101.

When data are transmitted some bits may be lost or

received incorrectly.

Two basic schemes to detect these events are referred to

as even parity and odd parity.

In either case, an additional bit is added to the digit being

transmitted.


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In even parity, the parity bit is set so that each character has an even

number of bits with the value 1.

In odd parity, the objective is that an odd number of bits should have

the value 1.

The pattern for 5 is 0000101. This pattern has two bits (an even

number) with a value of 1. Therefore, the parity bit that is added

would be zero if we were using even parity and 1 if we were using odd

parity.

The receiving device performs parity checking to verify that the proper

number of bits set to one in each character received.

Additional accuracy can be achieved with more complex parity

schemes.


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Parity checking



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Message Acknowledgment Techniques

A number of message acknowledgment

techniques can be used to let the sender of an

electronic message know that a message wasreceived:

Echo check

When data are transmitted, the system calculates asummary statistic such as the number of bits in themessage.

The receiving unit performs the same calculation (anecho check) and sends the result to the sending unit.

If the counts match, the transmission is presumedaccurate.


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Echo check

Trailer record

The sending unit stores control totals in a trailer record.

The receiving unit uses the information in those totals toverify the entire message was received.


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Echo check

Trailer record

Numbered batches

If a large message is transmitted in segments, each canbe numbered sequentially.

The receiving unit uses those numbers to properlyassemble the segments.


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Data entry controls

Processing controls


Output controls


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Output Controls

Careful checking of system output provides

additional control over processing integrity.

Output controls include:

User review ofoutput

Users carefully examine output for reasonableness,completeness, and to assure they are the intendedrecipient.


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Output Controls




User review of output

Reconciliation procedures

Periodically, all transactions and other system updatesshould be reconciled to control reports, filestatus/update reports, or other control mechanisms.

Control accounts should also be reconciled tosubsidiary account totals.


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Output Controls




User review of output

Reconciliation procedures

External data reconciliation

Database totals should periodically be reconciled with datamaintained outside the system.

EXAMPLE: Compare number of employee records in thepayroll file to number in the human resources file. (Excess

records in payroll suggests a ghost employee.)


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AVAILABILITY

Reliable systems are available for

use whenever needed.

Threats to system availability

originate from many sources,

including:

Hardware and software failures

Natural and man-made disasters

Human error

Worms and viruses Denial-of-service attacks and other

sabotage

SECURITY

CONFIDENTIALITY

PRIVACY

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A

VAILABILITY

SYSTEMSRELIABILITY


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AVAILABILITY

Proper controls can minimize the risk ofsignificant system downtime caused by thepreceding threats.

It is impossible to totally eliminate all threats. Consequently, organizations must develop

disaster recovery and business continuityplans to enable them to quickly resume

normal operations after such an event.


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AVAILABILITY

Minimizing Risk ofSystem Downtime

Loss of system availability can cause significantfinancial losses, especially if the system affected isessential to e-commerce.

Organizations can take a variety of steps tominimize the risk of system downtime.

Physical and logical access controls (Chapter 7) canreduce the risk of successful denial-of-service attacks.

Good computer security reduces risk of theft orsabotage of IS resources.


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AVAILABILITY

Preventive maintenance can reduce risk ofhardware and software failure. Examples:

Cleaning disk drivers

Properly storing magnetic and optical media

Use of redundant components can providefaulttolerance, which enables the system to continuefunctioning despite failure of a component.Examples of redundant components:

Dual processors

Arrays of multiple hard drives.


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AVAILABILITY

Surge protection devices provide protection

against temporary power fluctuations.

An uninterruptible power supply (UPS) provides

protection from a prolonged power outage andbuys the system enough time to back up critical

data and shut down safely.


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Risks associated with natural and man-madedisasters can be reduced with proper location anddesign of rooms housing mission-critical servers anddatabases.

Raised floors protect from flood damage.

Fire protection and suppression devices reduce likelihoodof fire damage.

Adequate air conditioning reduces likelihood of damage

from over-heating or humidity. Cables with special plugs that cannot be easily removed

reduce risk of damage due to accidentally unplugging.

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Training is especially important. Well-trained operators are less likely to make mistakes and

more able to recover if they do.

Security awareness training, particularly concerning safeemail and web-browsing practices, can reduce risk of virusand worm infection.

Anti-virus software should be installed, run, and keptcurrent.

Email should be scanned for viruses at both the

server and desktop levels. Newly acquired software and disks, CDs, or DVDs

should be scanned and tested first on a machine thatis isolated from the main network.

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Disaster Recovery and Business ContinuityPlanning

Disaster recovery and business continuity plans

are essential if an organization hopes to survive amajor catastrophe.

Being without an IS for even a short period of timecan be quite costlysome report as high as half amillion dollars per hour.

Yet many large U.S. companies do not haveadequate disaster recovery and businesscontinuity plans.

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The objectives of a disaster recovery andbusiness continuity plan are to:

Minimize the extent of the disruption, damage,

and loss Temporarily establish an alternative means of

processing information

Resume normal operations as soon as possible

Train and familiarize personnel with emergencyoperations

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Key components of effective disaster recoveryand business continuity plans include:

Data backup procedures

Provisions for access to replacementinfrastructure (equipment, facilities, phone lines,etc.)

Thorough documentation

Periodic testing

Adequate insurance

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Periodic testing

Adequate insurance

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Data Backup Procedures

Data need to be backed up regularly and

frequently.

A backup is an exact copy of the most currentversion of a database, file, or software program. It

is intended for use in the event of a hardware or

software failure.

The process of installing the backup copy for use is

called restoration.

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Several different backup procedures exist.

Afull backup is an exact copy of the data recordedon another physical media (tape, magnetic disk,CD, DVD, etc.)

Restoration involves bringing the backup copyonline.

Full backups are time consuming, so mostorganizations:

Do full backups weekly

Supplement with daily partial backups.

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Two types ofpartial backups are possible:

Incremental backup

Involves copying only the data items that havechanged since the last backup.

Produces a set of incremental backup files, eachcontaining the results of one days transactions.

Restoration:

First load the last full backup.

Then install each subsequent incrementalbackup in the proper sequence.

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Two types ofpartial backups are possible:

Incremental backup

Differential backup

All changes made since the last full backup are copied.

Each new differential backup file contains the cumulativeeffects of all activity since the last full backup.

Will normally take longer to do the backup than whenincremental backup is used.

Restoration:

First load the last full backup.

Then install the most recent differential backup file.

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Incremental and differential backups are both made

daily.

Additional intra-day backups are often made for mission-

critical databases.

Periodically, the system makes a copy of the database at

that point in time, called a checkpoint, and stores the copy

on backup media.

If a hardware or software fault interrupts processing, the

checkpoint is used to restart the system.

The only transactions that need to be reprocessed are

those that occurred since the last checkpoint.

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Whichever backup procedure is used, multiple

backup copies should be created:

One can be stored on-site for use in minor

incidents.

At least one additional copy should be stored off-

site to be safe should a disaster occur

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The offsite copies can be transported to

remote storage physically or electronically.

The same security controls should apply as to

original copies. Sensitive data should be encrypted in storage and

during transmission.

Access to the backup files should be carefully controlled

and monitored.

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Backups are retained for only a fixed period of time.

An archive is a copy of a database, master file, or

software that will be retained indefinitely as an

historical record, usually to satisfy legal andregulatory requirements.

Multiple copies of archives should be made and

stored in different locations.

Appropriate security controls should also be appliedto these files.

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Special attention should be paid to email, because ithas become an important archive of organizationalbehavior and information.

Access to email is often important when companies

are embroiled in lawsuits.

Organizations may be tempted to adopt a policy ofperiodically deleting all email to prevent a plaintiffsattorney from finding a smoking gun.

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Most experts advise against such policies and

recommend that organizations include email in their

backup and archive procedures because:

There are likely to be copies of the email stored in

locations outside the organization.

Such a policy would mean that the organization would not

be able to tell its side of the story.

Also, courts have sanctioned companies for failing to

provide timely access to email.

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Periodic testing

Adequate insurance

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Infrastructure Replacement

Major disasters can totally destroy an organizationsinformation processing center or make it inaccessible.

A key component of disaster recovery and business

continuity plans incorporates provisions for replacing thenecessary computing infrastructure, including:

Computers

Network equipment and access

Telephone lines

Office equipment Supplies

It may even be necessary to hire temporary staff.

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The least expensive approach.

The organization enters into an agreement with another organizationthat uses similar equipment to have temporary access to and use of


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Organizations have three basic options

for replacing computer and networking

equipment.

Reciprocal agreements

that uses similar equipment to have temporary access to and use oftheir information system resources in the event of a disaster.

Effective solutions for disasters of limited duration and magnitude,especially for small organizations.

Not optimal in major disasters as:

The host organization may also be affected.

The host also needs the resources.

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equipment.


Cold sites An empty building is purchased or leased and pre-wired for

necessary telephone and Internet access. Contracts are created with vendors to provide all necessary

computer and office equipment within a specified period of time.

Still leaves the organization without use of the IS for a period of time.

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equipment.


Cold sites

Hot sites

Most expensive solution but used by organizations like financialinstitutions and airlines which cannot survive any appreciable timewithout there IS.

The hot site is a facility that is pre-wired for phone and Internet (like

the cold site) but also contains the essential computing and officeequipment.

It is a backup infrastructure designed to provide fault tolerance inthe event of a major disaster.

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Periodic testing

Adequate insurance

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Documentation An important and often overlooked component. Should

include: The disaster recovery plan itself, including instructions for

notifying appropriate staff and the steps to resume operation,

needs to be well documented. Assignment of responsibility for the various activities.

Vendor documentation of hardware and software.

Documentation of modifications made to the default configuration(so replacement will have the same functionality).

Detailed operating instructions.

Copies of all documentation should be stored both on-siteand off-site.

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Periodic testing

Adequate insurance

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Testing

Periodic testing and revision is probably the mostimportant component of effective disasterrecovery and business continuity plans.

Most plans fail their initial test, because its impossibleto anticipate everything that could go wrong.

The time to discover these problems is before theactual emergency and in a setting where the

weaknesses can be carefully analyzed and appropriatechanges made.

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Plans should be tested on at least an annual

basis to ensure they reflect recent changes in

equipment and procedures.

Important to test procedures involved in executingreciprocal agreements or hot or cold sites.

Backup restoration procedures also require

practice.

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Brainstorming sessions involving mock scenarios canbe effective in identifying gaps and shortcomings. More realistic and detailed simulations or drills should also

be performed, although not to the expense of completelyperforming every activity.

Experts recommend testing individual components of theplans separately, because it is too difficult and costly tosimulate and analyze every aspect simultaneously.

The plan documentation needs to be updated toreflect any changes in procedure made in responseto problems identified during testing.

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Periodic testing Adequate insurance

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Insurance

Organizations should acquire adequate insurance

coverage to defray part or all of the expenses

associated with implementing their disasterrecovery and business continuity plans.

CHANGE MANAGEMENT CONTROLS


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Organizations constantly modify their information systems toreflect new business practices and to take advantage ofadvances in IT.

Controls are needed to ensure such changes dont negativelyimpact reliability.

Existing controls related to security, confidentiality, privacy,processing integrity, and availability should be modified tomaintain their effectiveness after the change.

Change management controls need to ensure adequate

segregation of duties is maintained in light of themodifications to the organizational structure and adoption ofnew software.



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Important change management controls include:

All change requests should be documented in a standard

format that identifies:

Nature of the change

Reason for the change

Date of the request

All changes should be approved by appropriate levels of

management.

Approvals should be clearly documented to provide an audit trail.

Management should consult with the CSO and other IT managers

about impact of the change on reliability.



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Changes should be thoroughly tested prior toimplementation.

Includes assessing effect of change on all five principles of systemsreliability.

Should occur in a separate, non-production environment.

All documentation (program instructions, systemdescriptions, backup and disaster recovery plans) shouldbe updated to reflect authorized changes to the system.

Emergency changes or deviations from policy must bedocumented and subjected to a formal review andapproval process as soon after implementation as

practicable. All such actions should be logged to providean audit trail.



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Backout plans should be developed for reverting

to the previous configuration if the approved

changes need to be interrupted or aborted.

User rights and privileges should be carefullymonitored during the change process to ensure

proper segregation of duties.



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C G G CO O S

The most important change management control isadequate monitoring and review by topmanagement to ensure that the changes areconsistent with the entitys multiyear strategic plan.

Objective: Be sure the system continues toeffectively support the organizations strategy.

Steering committees are often created to performthis function.

SUMMARY


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SUMMARY

In this chapter, youve learned about thecontrols used to protect the confidentiality ofsensitive information and the controls used toprotect the privacy of customer information.

Youve also learned about controls that helpensure processing integrity.

Finally, youve learned about controls to

ensure that the system is available whenneeded.