Chapter 8

Chapter 8
Securing Information
Systems
Management Information Systems
Chapter 8 Securing Information Systems
LEARNING OBJECTIVES
• Explain why information systems are vulnerable to

destruction, error, and abuse.
• Assess the business value of security and control.
• Identify the components of an organizational
framework for security and control.
• Evaluate the most important tools and technologies
for safeguarding information resources.
System Vulnerability and Abuse
• Security:
• Policies, procedures and technical measures used to prevent
unauthorized access, alteration, theft, or physical damage to
information systems
• Controls:
• Methods, policies, and organizational procedures that ensure
safety of organization’s assets; accuracy and reliability of its
accounting records; and operational adherence to
management standards

• Why systems are vulnerable
• Hardware problems
• Breakdowns, configuration errors, damage from improper
use or crime
• Software problems
• Programming errors, installation errors, unauthorized
changes)
• Disasters
• Power failures, flood, fires, etc.
• Use of networks and computers outside of
firm’s control
• E.g., with domestic or offshore outsourcing vendors
Contemporary Security Challenges and Vulnerabilities
The architecture of a Web-based application typically includes a Web client, a server, and corporate information
systems linked to databases. Each of these components presents security challenges and vulnerabilities.
Floods, fires, power failures, and other electrical problems can cause disruptions at any point in the network.
Figure 8-1
• Internet vulnerabilities
• Network open to anyone
• Size of Internet means abuses can have wide impact
• Use of fixed Internet addresses with permanent

connections to Internet eases identification by hackers
• E-mail attachments
• E-mail used for transmitting trade secrets
• IM messages lack security, can be easily intercepted

• Wireless security challenges

• Radio frequency bands easy to scan
• SSIDs (service set identifiers)
• Identify access points
• Broadcast multiple times
• War driving
• Eavesdroppers drive by buildings and try to intercept network traffic
• When hacker gains access to SSID, has access to network’s
resources
• WEP (Wired Equivalent Privacy)
• Security standard for 802.11 WPA2
• Basic specification uses shared password for both users and access
point
• Users often fail to use security features
Wi-Fi Security Challenges
Figure 8-2
Many Wi-Fi networks can be
penetrated easily by intruders
using sniffer programs to obtain
an address to access the
resources of a network without
authorization.
• Malicious software (malware) (Table 8.1 Page 297)

• Viruses: Rogue software program that attaches itself to other
software programs or data files in order to be executed
• Worms: Independent computer programs that copy themselves from
one computer to other computers over a network
• Trojan horses: Software program that appears to be benign but
then does something other than expected
• Spyware: Small programs install themselves surreptitiously on
computers to monitor user Web surfing activity and serve up
advertising
• Key loggers: Record every keystroke on computer to steal serial
numbers, passwords, launch Internet attacks
• SQL Injection ?
• Hackers and computer crime

• Hackers vs. crackers
• Activities include
• System intrusion
• Theft of goods and information
• System damage
• Cybervandalism
• Intentional disruption, defacement, destruction of
Web site or corporate information system
• Spoofing
• Misrepresenting oneself by using fake e-mail addresses or
masquerading as someone else
• Redirecting Web link to address different from intended one,
with site masquerading as intended destination
• Sniffer: Eavesdropping program that monitors information
traveling over network
• Denial-of-service attacks (DoS): Flooding server with
thousands of false requests to crash the network
• Distributed denial-of-service attacks (DDoS): Use of
numerous computers to launch a DoS
• Botnets: Networks of “zombie” PCs infiltrated by bot malware
• Logic Bomb, Dumpster Driving
• Computer crime
• Defined as “any violations of criminal law that involve a
knowledge of computer technology for their perpetration,
investigation, or prosecution”
• Computer may be target of crime, e.g.:
• Breaching confidentiality of protected computerized data
• Accessing a computer system without authority
• Computer may be instrument of crime, e.g.:
• Theft of trade secrets
• Using e-mail for threats or harassment
• Identity theft: Theft of personal Information (social security id,

driver’s license or credit card numbers) to impersonate someone
else
• Phishing: Setting up fake Web sites or sending e-mail
messages that look like legitimate businesses to ask users for
confidential personal data.
• Evil twins: Wireless networks that pretend to offer trustworthy
Wi-Fi connections to the Internet
• Pharming: Redirects users to a bogus Web page, even when
individual types correct Web page address into his or her browser
• Click fraud
• Individual or computer program clicks online ad
without any intention of learning more or making a
purchase
• Global threats - Cyberterrorism and cyberwarfare
• Concern that Internet vulnerabilities and other
networks make digital networks easy targets for
digital attacks by terrorists, foreign intelligence
services, or other groups
• Internal threats – Employees

• Security threats often originate inside an
organization
• Inside knowledge
• Sloppy security procedures
• User lack of knowledge
• Social engineering:
• Tricking employees into revealing their passwords by
pretending to be legitimate members of the company
in need of information
• Software vulnerability
• Commercial software contains flaws that create
security vulnerabilities
• Hidden bugs (program code defects)
• Zero defects cannot be achieved because complete testing
is not possible with large programs
• Flaws can open networks to intruders
• Patches
• Vendors release small pieces of software to repair flaws
• However, amount of software in use can mean exploits created
faster than patches be released and implemented
Business Value of Security and Control
• Lack of security, control can lead to

• Loss of revenue
• Failed computer systems can lead to significant or
total loss of business function
• Lowered market value:
• Information assets can have tremendous value
• A security breach may cut into firm’s market value
almost immediately
• Legal liability
• Lowered employee productivity
• Higher operational costs
• Legal and regulatory requirements for electronic

records management
• Firms face new legal obligations for the retention
and storage of electronic records as well as for
privacy protection
• HIPAA: Medical security and privacy rules and procedures
• Gramm-Leach-Bliley Act: Requires financial institutions to
ensure the security and confidentiality of customer data
• Sarbanes-Oxley Act: Imposes responsibility on companies
and their management to safeguard the accuracy and integrity
of financial information that is used internally and released
externally
• Electronic evidence
• Evidence for white collar crimes often found in
digital form
• Data stored on computer devices, e-mail, instant messages,
e-commerce transactions
• Proper control of data can save time, money when
responding to legal discovery request
• Computer forensics:
• Scientific collection, examination, authentication, preservation,
and analysis of data from computer storage media for use as
evidence in court of law
• Includes recovery of ambient and hidden data
Establishing a Framework for Security and Control
• Information systems controls

• General controls
• Govern design, security, and use of computer programs
and data throughout organization’s IT infrastructure
• Combination of hardware, software, and manual
procedures to create overall control environment
• Types of general controls
• Software controls
• Hardware controls
• Computer operations controls
• Data security controls
• Implementation controls
• Administrative controls
• Application controls
• Specific controls unique to each computerized application,
such as payroll or order processing
• Include both automated and manual procedures
• Ensure that only authorized data are completely and
accurately processed by that application
• Types of application controls:
• Input controls
• Processing controls
• Output controls
• Risk assessment
• Determines level of risk to firm if specific activity or process is
not properly controlled
• Types of threat
• Probability of occurrence during year
• Potential losses, value of threat
• Expected annual loss
EXPOSURE PROBABILITY LOSS RANGE (AVERAGE) EXPECTED

ANNUAL LOSS
Power failure 30% $5K - $200K ($102,500) $30,750
Embezzlement 5% $1K - $50K ($25,500) $1,275
User error 98% $200 - $40K ($20,100) $19,698

• Security policy
• Ranks information risks, identifies acceptable security goals,
and identifies mechanisms for achieving these goals
• Drives other policies
• Acceptable use policy (AUP): Defines acceptable uses
of firm’s information resources and computing equipment
• Authorization policies: Determine differing levels of user
access to information assets
• Authorization management systems

• Allow each user access only to those portions of system that
person is permitted to enter, based on information established
by set of access rules, profile
Security Profiles for a Personnel System
Figure 8-3
These two examples
represent two security
profiles or data security
patterns that might be
found in a personnel
system. Depending on
the security profile, a
user would have certain
restrictions on access to
various systems,
locations, or data in an
organization.
• Disaster recovery planning: Devises plans for restoration of

disrupted services
• Business continuity planning: Focuses on restoring
business operations after disaster
• Both types of plans needed to identify firm’s most critical
systems and business processes
• Business impact analysis to determine impact of an outage
• Management must determine
• Maximum time systems can be down
• Which systems must be restored first
• MIS audit
• Examines firm’s overall security environment as well as
controls governing individual information systems
• Reviews technologies, procedures, documentation, training,
and personnel
• May even simulate disaster to test response of technology, IS
staff, other employees
• Lists and ranks all control weaknesses and estimates
probability of their occurrence
• Assesses financial and organizational impact of each threat
Sample Auditor’s List of Control Weaknesses
Figure 8-4
This chart is a sample page from
a list of control weaknesses that
an auditor might find in a loan
system in a local commercial
bank. This form helps auditors
record and evaluate control
weaknesses and shows the
results of discussing those
weaknesses with management,
as well as any corrective actions
taken by management.
Technologies and Tools for Security
• Access control: Policies and procedures to prevent

improper access to systems by unauthorized
insiders and outsiders
• Authorization
• Authentication
• Password systems
• Tokens
• Smart cards
• Biometric authentication
• Firewall: Hardware and/or software to prevent

unauthorized access to private networks
• Screening technologies
• Packet filtering
• Stateful inspection
• Network address translation (NAT)
• Application proxy filtering
• Intrusion detection systems: Monitor vulnerable
points on networks to detect and deter intruders
• Examines events as they are happening to discover attacks
in progress
• Scans network to find patterns indicative of attacks
A Corporate Firewall
The firewall is placed between the firm’s private

network and the public Internet or another
distrusted network to protect against
unauthorized traffic.
Figure 8-5
• Antivirus and antispyware software:

• Checks computers for presence of malware and can often
eliminate it as well
• Require continual updating
• Unified threat management (UTM)
• Comprehensive security management products
• Tools include
• Firewalls
• Intrusion detection
• VPNs
• Web content filtering
• Antispam software
• Securing wireless networks

• WEP security can be improved:
• Activating it
• Assigning unique name to network’s SSID
• Using it with VPN technology
• Wi-Fi Alliance finalized WAP2 specification,

replacing WEP with stronger standards
• Continually changing keys
• Encrypted authentication system with central server
• Encryption:
• Transforming text or data into cipher text that cannot
be read by unintended recipients
• Two methods for encrypting network traffic
• Secure Sockets Layer (SSL) and successor Transport
Layer Security (TLS)
• Secure Hypertext Transfer Protocol (S-HTTP)
• Two methods of encryption
• Symmetric key encryption
• Public key encryption
Public Key Encryption
A public key encryption system can be viewed as a series of public and private keys that lock data when they are
transmitted and unlock the data when they are received. The sender locates the recipient’s public key in a directory and
uses it to encrypt a message. The message is sent in encrypted form over the Internet or a private network. When the
encrypted message arrives, the recipient uses his or her private key to decrypt the data and read the message.
Figure 7-6
• Digital certificate:
• Data file used to establish the identity of users and electronic
assets for protection of online transactions
• Uses a trusted third party, certification authority (CA), to
validate a user’s identity
• CA verifies user’s identity, stores information in CA server,
which generates encrypted digital certificate containing
owner ID information and copy of owner’s public key
• Public key infrastructure (PKI)
• Use of public key cryptography working with certificate
authority
• Widely used in e-commerce
Digital Certificates
Figure 8-7
Digital certificates help
establish the identity of
people or electronic assets.
They protect online
transactions by providing
secure, encrypted, online
communication.
• Ensuring system availability

• Online transaction processing requires 100%
availability, no downtime
• Fault-tolerant computer systems
• For continuous availability
• Contain redundant hardware, software, and power supply
components to provide continuous, uninterrupted service
• High-availability computing
• Helps recover quickly from crash
• Minimizes, does not eliminate downtime
• Recovery-oriented computing
• Designing systems that recover quickly with capabilities to
help operators pinpoint and correct of faults in multi-
component systems
• Controlling network traffic
• Deep packet inspection (DPI)
• Security outsourcing
• Managed security service providers (MSSPs)
Can Salesforce.com On-Demand Remain in Demand?

• Read the Interactive Session: Technology and then
discuss the following questions:
• How did the problems experienced by Salesforce.com
impact its business?
• How did the problems impact its customers?
• What steps did Salesforce.com take to solve the
problems? Were these steps sufficient?
• List and describe other vulnerabilities discussed in this
chapter that might create outages at Salesforce.com and
measures to safeguard against them.
• Ensuring software quality

• Software Metrics: Objective assessments of system in
form of quantified measurements
• Number of transactions
• Online response time
• Payroll checks printed per hour
• Known bugs per hundred lines of code
• Testing: Early and regular testing
• Walkthrough: Review of specification or design
document by small group of qualified people
• Debugging: Process by which errors are eliminated

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Chapter 8

• Explain why information systems are vulnerable to

System Vulnerability and Abuse

System Vulnerability and Abuse

System Vulnerability and Abuse

Contemporary Security Challenges and Vulnerabilities

System Vulnerability and Abuse

• Size of Internet means abuses can have wide impact

• Use of fixed Internet addresses with permanent

• E-mail used for transmitting trade secrets

• IM messages lack security, can be easily intercepted

System Vulnerability and Abuse

• Wireless security challenges

System Vulnerability and Abuse

Wi-Fi Security Challenges

System Vulnerability and Abuse

• Malicious software (malware) (Table 8.1 Page 297)

System Vulnerability and Abuse

• Hackers and computer crime

System Vulnerability and Abuse

System Vulnerability and Abuse

System Vulnerability and Abuse

• Identity theft: Theft of personal Information (social security id,

System Vulnerability and Abuse

System Vulnerability and Abuse

• Internal threats – Employees

System Vulnerability and Abuse

Business Value of Security and Control

• Lack of security, control can lead to

Business Value of Security and Control

• Legal and regulatory requirements for electronic

Business Value of Security and Control

Establishing a Framework for Security and Control

• Information systems controls

Establishing a Framework for Security and Control

Establishing a Framework for Security and Control

EXPOSURE PROBABILITY LOSS RANGE (AVERAGE) EXPECTED

Power failure 30% $5K - $200K ($102,500) $30,750

Embezzlement 5% $1K - $50K ($25,500) $1,275

User error 98% $200 - $40K ($20,100) $19,698

Establishing a Framework for Security and Control

• Authorization management systems

Establishing a Framework for Security and Control

Security Profiles for a Personnel System

Establishing a Framework for Security and Control

• Disaster recovery planning: Devises plans for restoration of

Establishing a Framework for Security and Control

Establishing a Framework for Security and Control

Sample Auditor’s List of Control Weaknesses

Technologies and Tools for Security

• Access control: Policies and procedures to prevent

Technologies and Tools for Security

• Firewall: Hardware and/or software to prevent

Technologies and Tools for Security

The firewall is placed between the firm’s private

Technologies and Tools for Security

• Antivirus and antispyware software:

Technologies and Tools for Security

• Securing wireless networks

• Wi-Fi Alliance finalized WAP2 specification,