10/29/2014

Securing Information
Systems

You’re on LinkedIn? Watch Out!

• Problem: Massive data breach; using old security

practices
• Solution: Initiative to use minimal up-to-date
industry practices, for example, salting passwords
• Illustrates the need for security practices to keep up
with current standards and threats
• Demonstrates the lack of regulation for corporate
computer security and social network data security;
poor data protection by many companies

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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

System Vulnerability and Abuse

• 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 - . When data are available over a
network, there are even more vulnerabilities
• E.g., with domestic or offshore outsourcing vendors

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System Vulnerability and Abuse

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.

System Vulnerability and Abuse

• Internet vulnerabilities - Internet is so huge that when

abuses do occur, they can have an enormously widespread
impact. And when the Internet becomes part of the corporate
network, the organization’s information systems are even
more vulnerable to actions from outsiders
• 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

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Compromising Web Sites

• SQL injection technique exploits sloppy programming practices that do not
validate user input
•Hackers submit data to Web forms that exploits site’s
unprotected software and sends rogue SQL query to database
– IBM identifies SQL injection as the fastest growing security threat, with over half a million
attack attempts recorded each day.
– Firms have to check the integrity of their Web sites for vulnerabilities
• Related programming exploits:
– DNS cache poisoning exploits

• can redirect Internet address to IP address mapping

and the consequences are huge.
– Cross-site scripting attacks

• may be used by attackers to bypass access controls

accounted for roughly 80.5% of all security
vulnerabilities documented by Symantec as of 2007
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Securing Wireless Networks - 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
• The WEP specification calls for an access point and its users to
share the same 40-bit encrypted password.
• Basic specification uses shared password for both users and access point
• Users often fail to use security features
• Assigning unique name to network’s SSID
• TJX fiasco – they should have used WPA (Now WPA2)
• Wi-Fi Alliance finalized WAP2 specification, replacing WEP with stronger
standards
• Continually changing keys
• Encrypted authentication system with central server

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System Vulnerability and Abuse

The service set

identifiers (SSIDs) Wi-Fi Security Challenges
identifying the access
points in a Wi-Fi
network are broadcast
multiple times (as
illustrated by the orange
sphere) and can be
picked up fairly easily
by intruders’ sniffer
programs
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.

The TJX Breach

• Business establishments are increasingly under risk of
information security threats
• Network in TJX retail store was infiltrated via an insecure Wi-Fi base
station
• 45.7 million credit and debit card numbers were stolen
• Driver’s licenses and other private information pilfered from 450,000
customers
• TJX suffered under settlement costs and court-imposed punitive
action to the tune of $150 million
• Even without lawsuit liabilities, Forrester Research estimates that
the cost to TJX for the data breach could surpass $1 billion over
five years.

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The TJX Breach

• Factors that amplified severity of TJX security breach are:
– Personnel betrayal: An alleged FBI informant used insider information to mastermind the attacks
– Management gaffe: Executives made conscious decisions not to upgrade legacy systems that were
vulnerable to security compromises
– Technology lapse: TJX used WEP, a insecure wireless security technology

• failed to follow the most basic security measures like installing

antivirus software, upgrading wireless security, encrypting data,
and creating and using access controls, and establishing
information system controls (general and application).
– Procedural gaffes: TJX had received an extension on the rollout of mechanisms that might have
discovered and plugged the hole before the hackers got in

• Also willfully violated the Payment Card Industry (PCI) Data

Security Standard by holding onto data for years

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System Vulnerability and Abuse

•Malware (malicious software)
• Viruses
• Rogue software program that attaches itself to other
software programs or data files in order to be executed
• Worms
• Independent programs that copy themselves from one
computer to other computers over a network.
• Worms and viruses spread by
• Downloads (drive-by downloads)
• E-mail, IM attachments
• Downloads on Web sites and social networks

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System Vulnerability and Abuse

•Malware (cont.)
• Smartphones as vulnerable as computers
• Study finds 13,000 types of smartphone malware
• Trojan horses
• Software that appears benign but does something other than
expected
• In 2004, users were enticed by a sales message from a
supposed anti-virus vendor.
• On the vendor’s site, a small program called Mitglieder was
downloaded to the user’s machine. The program
• SQL injection attacks (already discussed)
• Hackers submit data to Web forms that exploits site’s
unprotected software and sends rogue SQL query to database

System Vulnerability and Abuse

•Malware (cont.)
• 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
• Other types:
• Reset browser home page
• Redirect search requests
• Slow computer performance by taking up memory

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Cookies
• Cookie – a small file that contains information about you and
your Web activities, which a Web site places on your computer
• Handle cookies by using
• Web browser cookie management option
• Buy a program that manages cookies
• Not executable, cannot deliver a virus or other malicious code
• Only web server that delivered it can read it
• Your computer can store cookies from many web sites
• May be a security risk if it is implemented poorly on site that you
have shared personal information with and rely on cookies to
access it
• Anyone who can access the cookie on your hard drive can now access that
personal information
• Most reputable sites to not rely on cookies for authentication alone.

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Hackers and Computer Crime

• 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:
• Computer may be instrument of crime:

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System Vulnerability and Abuse

•Hackers and computer crime

–Hackers vs. crackers
–Activities include:
•System intrusion
•System damage
•Cybervandalism
–Intentional disruption, defacement, destruction of
Web site or corporate information system
–White hat hacker – hackers hired by companies
to reveal security weaknesses within the firm’s
systems

System Vulnerability and Abuse

•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
–Enables hackers to steal proprietary information such as e-
mail, company files, and so on
• use your debit card information to purchase items illegally.
• steal your logon and passwords for various accounts.
• assume your identity.

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System Vulnerability and Abuse

•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
• Deliver 90% of world spam, 80% of world malware
• Grum botnet: controlled 560K to 840K computers

System Vulnerability and Abuse

•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, for example:
• Breaching confidentiality of protected computerized data
• Accessing a computer system without authority
• Computer may be instrument of crime, for example:
• Theft of trade secrets
• Using e-mail for threats or harassment

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System Vulnerability and Abuse

•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

System Vulnerability and Abuse

•Pharming
–Redirects users to a bogus Web page, even when
individual types correct Web page address into his or
her browser
•Click fraud
–Occurs when individual or computer program
fraudulently clicks on online ad without any intention
of learning more about the advertiser or making a
purchase
•Cyberterrorism and Cyberwarfare

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Stuxnet and the Changing Face of Cyberwarfare

• Is cyberwarfare a serious problem? Why or why not?

• Assess the management, organization, and technology factors
that have created this problem.
• What makes Stuxnet different from other cyberwarfare
attacks? How serious a threat is this technology?
• What solutions have been proposed for this problem? Do you
think they will be effective? Why or why not?

System Vulnerability and Abuse

•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

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System Vulnerability and Abuse

•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
• Small pieces of software to repair flaws
• Exploits often created faster than patches can be released
and implemented

Business Value of Security and Control

•Failed computer systems can lead to

significant or total loss of business function.
•Firms now are more vulnerable than ever.
• Confidential personal and financial data
• Trade secrets, new products, strategies
•A security breach may cut into a firm’s market
value almost immediately.
•Inadequate security and controls also bring
forth issues of liability.

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Business Value of Security and Control

•Legal and regulatory requirements for electronic

records management and privacy protection
• 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

Business Value of Security and Control

•Electronic evidence
–Evidence for white collar crimes often in digital form
• Data on computers, e-mail, instant messages, e-
commerce transactions
–Proper control of data can save time and 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

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Establishing a Framework for Security and Control

•Information systems controls

• Manual and automated controls
• General and application controls
•General controls
• Govern design, security, and use of computer
programs and security of data files in general
throughout organization’s information technology
infrastructure
• Apply to all computerized applications
• Combination of hardware, software, and manual
procedures to create overall control environment

Establishing a Framework for Security and Control

• 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 - input authorization, data conversion, data
editing, and error handling
• Processing controls - establish that data are complete and
accurate during updating
• Output controls - ensure that the results of computer
processing are accurate, complete, and properly distributed

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Establishing a Framework for Security and Control

• 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
•Risk cost = probability X impact
EXPECTED
EXPOSURE PROBABILITY LOSS RANGE (AVG) 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

Establishing a Framework for Security and Control

•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

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Establishing a Framework for Security and Control

•Identity management
–Business processes and tools to identify valid users
of system and control access
• Identifies and authorizes different categories of users
• Specifies which portion of system users can access
• Authenticating users and protects identities
–Identity management systems
• Captures access rules for different levels of users

Establishing a Framework for Security and Control

Security Profiles for a Personnel System

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.

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Establishing a Framework for Security and Control

•Disaster recovery planning: Devises plans for

restoration of disrupted services
• MasterCard, maintains a duplicate computer center in
Kansas City, Missouri, to serve as an emergency backup
to its primary computer center in St. Louis.

•Business continuity planning: Focuses on

restoring business operations after disaster
• Both types of plans needed to identify firm’s most critical
systems
• Business impact analysis to determine impact of an outage
• Management must determine which systems restored first

Establishing a Framework for Security and Control

The Role of Auditing

• MIS audit - determines if existing security
measures and controls are effective
• 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

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SAMPLE AUDITOR’S LIST OF CONTROL WEAKNESSES

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.

FIGURE 8-4

Technologies and Tools for Protecting Information Resources

•Identity management software

–Automates keeping track of all users and privileges
–Authenticates users, protecting identities, controlling
access
•Authentication
–Password systems
–Tokens - – may be physical device or software that
authorized user is given to make authentication easier/
quicker
–Smart cards
–Biometric authentication

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Technologies and Tools for Protecting Information Resources

•Firewall:
–Combination of hardware and software that
prevents unauthorized users from accessing
private networks
–Firewalls can deter, but not completely
prevent, network penetration by outsiders
and should be viewed as one element in an
overall security plan

A CORPORATE FIREWALL

FIGURE 8-5 The firewall is placed between the

firm’s private network and the
public Internet or another
distrusted network to protect
against unauthorized
traffic.

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Technologies and Tools for Protecting Information Resources

•Intrusion detection systems:

• Monitors hot spots on corporate networks to detect
and deter intruders
• Examines events as they are happening to discover
attacks in progress
•Antivirus and antispyware software:
• Checks computers for presence of malware and can
often eliminate it as well
• Requires continual updating

• Unified threat management (UTM) System

• Comprehensive security management products
• Tools include
• Firewalls
• Intrusion detection
• Web content filtering –
• What bothers management is not knowing what employees are doing
on the web:
• How much time do employees spend on social networks or gaming
sites?
• Is anyone downloading malware or pornography?
• Why is the Internet running slowly today?
• Antispam software – why?

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Technologies and Tools for Protecting Information Resources

•Securing wireless networks

• WEP security can provide some security by:
• Assigning unique name to network’s SSID and
not broadcasting 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

Technologies and Tools for Protecting Information Resources

•Encryption:
–Transforming text or data into cipher text
that cannot be read by unintended
recipients
–Two methods for encryption on networks
•Secure Sockets Layer (SSL) and successor
Transport Layer Security (TLS)
•Secure Hypertext Transfer Protocol (S-
HTTP)

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Technologies and Tools for Protecting Information Resources

•Two methods of encryption

• Symmetric key encryption
• Sender and receiver use single, shared key
• Public key encryption
• Uses two, mathematically related keys: Public key
and private key
• Sender encrypts message with recipient’s public
key
• Recipient decrypts with private key

Technologies and Tools for Security

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.

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Technologies and Tools for Protecting Information Resources

•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

Digital certificates help

establish the identity of people
or electronic assets. They
protect online transactions by
providing secure, encrypted,
online communication.

The institution or individual

requests a certificate over the
Internet from a CA; the certificate
received from the CA can then be
used to validate a transaction with
an online merchant or customer.

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Technologies and Tools for Protecting Information Resources

• Ensuring system availability
– Online transaction processing requires 100% availability, no downtime
– There is a huge $$ loss in downtime
• Fault-tolerant computer systems
– For continuous availability, for example, stock markets
– Contain redundant hardware, software, and power supply components
that create an environment that provides continuous, uninterrupted
service
• High-availability computing
– Helps recover quickly from crash
– Minimizes, does not eliminate, downtime
• Firms with heavy e-commerce processing or for
firms that depend on digital networks for their
internal operations require high-availability
computing, using tools such as backup servers,
distribution of processing across multiple servers,
high-capacity storage, and good disaster recovery
and business continuity plans

Hot Site
• A hot site is a commercial disaster recovery service that allows a business to
continue computer and network operations in the event of a computer or
equipment disaster.
• If an firm’s data center becomes inoperable it can move all data processing
operations to a hot site.
• A hot site is a duplicate of the original site of the organization, with full
computer systems as well as near-complete backups of user data.
• The site has all the equipment needed for the enterprise to continue
operation, including office space and furniture, telephone jacks and
computer equipment.
• Real time synchronization between the two sites may be used to completely
mirror the data environment of the original site.
• Following a disruption to the original site, the hot site exists so that the
organization can relocate with minimal losses to normal operations.
• Ideally, a hot site will be up and running within a matter of hours or even less.
• Example – Hurricane Katrina - oil company hot sites

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Technologies and Tools for Security

• 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- enables a network to sort low-
priority data packets from high-priority ones in order to improve
performance for business critical communication
• Deep packet inspection (DPI) - enables a network to sort low-
priority data packets from high-priority ones in order to
improve performance for business critical communication.
• Security outsourcing
• Managed security service providers (MSSPs)

Technologies and Tools for Protecting Information Resources

•Security in the cloud

• Responsibility for security resides with company
owning the data
• Firms must ensure providers provides adequate
protection:
• Where data are stored
• Meeting corporate requirements, legal privacy laws
• Segregation of data from other clients
• Audits and security certifications
• Service level agreements (SLAs)

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Technologies and Tools for Protecting Information Resources

•Securing mobile platforms

• Security policies should include and cover any special
requirements for mobile devices
• Guidelines for use of platforms and applications
• Mobile device management tools
• Authorization
• Inventory records
• Control updates
• Lock down/erase lost devices
• Encryption
• Software for segregating corporate data on devices

How Secure Is Your Smartphone?

• It has been said that a smartphone is a microcomputer in your

hand. Discuss the security implications of this statement.
• What management, organizational, and technology issues must
be addressed by smartphone security?
• What problems do smartphone security weaknesses cause for
businesses?
• What steps can individuals and businesses take to make their
smartphones more secure?

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Technologies and Tools for Protecting Information Resources

•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 - WalkthTesting is complex and
requires various types of tests
• rough: Review of specification or design document by small
group of qualified people
• Debugging: Process by which errors are eliminated
• Majority of testing done by IS – error free, performance: response
time, throughput, accuracy
• Some testing done by end users – does the system meet the
functional requirements as originally described in the
Requirements document

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