PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check – Limit check – Range • check Determines whether a logical relationship seems to – Size (or be capacity) check correct. – Completeness check • Example: A freshman with annual annual financial aid of $60,000 is probably not reasonable. – Validity check – Reasonableness test
PROCESSING INTEGRITY • 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.
PROCESSING INTEGRITY • 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.
PROCESSING INTEGRITY • Records information about data input or processing •
errors (when they occurred, cause, when they were corrected and resubmitted). Additional Batch Processing Data Entry • Errors should be investigated, corrected, and resubmitted on a timely basis (usually with the next Controls batch) and subjected to the same input validation v alidation – In addition to the preceding controls, when routines. • batch using the periodically following to data The log processing, should be reviewed ensure that all errors have been corrected and then used to entry controls should be incorporated. prepare an error report, summarizing errors by • Sequence check record type, error type, cause, and disposition.
• Error log
PROCESSING INTEGRITY • Summarize key values for a batch of input records. •
Commonly used batch totals include: – Financial totals—sums of fields that contain dollar Additional Batch Processing Data Entry values, such as total sales. Controls – Hash totals—sums of nonfinancial fields, such as the sum of all social security numbers of – In addition to the preceding employees being paid. controls, when using batch processing, the data – Record count—count of following the number of records in a batch. entry controls should be incorporated. • These batch totals are calculated and recorded when • Sequence check data is entered and used later to verify that all input • Errorwas log processed correctly.
• Batch totals
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data •
•
Whenever possible, the system should automatically enter transaction data, such as next available document number or new ID number. Saves keying time and reduces errors.
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting •
System requests each input item and waits for an acceptable response.
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting • Pre-formatting •
Fields that need to be completed are highlighted.
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting • Pre-formatting • Closed-loop verification • •
Checks accuracy of input data by retrieving related information. Example: When a customer’s account account number number is entered, the associated customer’s name is displayed on the screen so the user can verify that entries are being made for the correct account.
•
Maintains a detailed record of all transaction data, including: – A unique transaction identifier – Date and time of entry – Terminal from which entry is made Additional online data entry controls – Transmission line – Online processing data entry controls include: – Operator identification • Automatic entry of in data – Sequence which transaction is entered • The log can be used to reconstruct a file that is • Prompting damaged or can be used to ensure transactions are • Pre-formatting not lost or entered twice if a malfunction shuts down the system. • Closed-loop verification
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•
• Transaction logs
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting • Pre-formatting • Closed-loop verification • Transaction logs • Error messages •
Should indicate when an error occurred, which item, and how it should be corrected.
PROCESSING INTEGRITY • 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
PROCESSING INTEGRITY • Processing Controls – Processing controls to ensure that data is processed correctly include: • Data matching • •
Two or more items must match before processing can proceed. Example: The quantity quantity billed on the vendor invoice invoice must match the quantity ordered on the purchase order and the quantity received on the receiving report.
PROCESSING INTEGRITY • Processing Controls – Processing controls to ensure that data is processed correctly include: • Data matching • File labels • •
External labels should be checked visually to ensure the correct and most 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 totals calculated during input.
•
Batch totals should be recomputed as processing takes place. • These totals should be compared to the totals in the t he 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. • Processing Controls – If the recomputed record count is larger than the original, then –additional Processing controls to ensure that data isor some unauthorized transactions were processed s ome authorized transactions were processed twice. processed correctly include: – If the discrepancy between totals is evenly divisible by 9, there • Data matching was probably a transposition error (two adjacent digits were reversed). • File labels
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• Recalculation of batch totals
PROCESSING INTEGRITY • Processing Controls – Processing controls to ensure that data is processed correctly include: • Data matching • File labels • Recalculation Recalculation of batch totals • Cross-footing balance test • •
Compares arithmetic results produced by two different methods to verify accuracy. EXAMPLE: Compute the sum of column totals in a spreadsheet and compare it to a sum of the row totals.
CONFIDENTIALITY • Employee use of email and instant messaging (IM) probably represents two of the greatest threats to the confidentiality of sensitive information. – Once sent, there is no way to retrieve or control its distribution. – Organization Organizations s need to develop comprehensive policies governing the appropriate and allowable use of these technologies for business purposes. – Employees need to be trained on what type of information they can and cannot share, especially with IM.
PROCESSING INTEGRITY • Processing Controls – Processing controls to ensure that data is processed correctly include: • Data matching • File labels • Recalculation Recalculation of batch totals • Cross-footing balance test • Write-protection mechanisms •
Protect against accidental writing over or erasing of data files but are not foolproof.
PROCESSING INTEGRITY •
Database systems use database administrators, data • Processing Controls dictionaries, and concurrent update controls to ensure controls processingto integrity. – Processing ensure that data is • The administrator establishes and enforces processed correctly include: procedures for accessing and updating the database.
• Data matching • The data dictionary ensures that data items are defined and used consistently. • File labels
• Concurrent update controls protect records from • Recalculation Recalculatio n of batch totals being updated by two users simultaneously. • Cross-footing balance test – Locks one user out until the other has finished
processing. • Write-protection mechanisms • Database processing integrity procedures
PROCESSING INTEGRITY • Processing Controls – Processing controls to ensure that data is • Whencorrectly changing systems, data from old files and processed include: • • • • • •
databases are entered into new data structures. Data matching • Conversion controls help ensure that the new data File labels storage media are free of errors. • Old and n new should be run in parallel at Recalculation Recalculatio of systems batch totals least once and results compared to identify Cross-footing balance test discrepancies. Write-protection mechanisms • Internal auditors should review data conversion processes for accuracy. Database processing integrity procedures
• Data conversion controls
PROCESSING INTEGRITY • 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
PROCESSING INTEGRITY • 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 the sending 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
PROCESSING INTEGRITY • 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 the sending 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
PROCESSING INTEGRITY • Parity checking – Computers represent characters as a set of binary digits (bits). – For example, “5” is represented by the seven-bit pattern 0000101. – 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.
PROCESSING INTEGRITY – 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 for 5 is 0000101. This pattern has two bits (an even number) with a value of 1. Therefore, the parity parity bit that is 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.
PROCESSING INTEGRITY • 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 the sending 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
PROCESSING INTEGRITY When data are transmitted, the system calculates a summary statistic such as the number of bits in the message. • The receiving unit performs the same calculation (an “echo A number ofsends message check”) and the resultacknowledgment to the sending unit. match, transmission presumed accurate. • If the countscan techniques betheused to letisthe sender of •
• Message Acknowledgment Techniques –
an electronic message know that a message was received: • Echo check
PROCESSING INTEGRITY • Message Acknowledgment Techniques – A number of message acknowledgment techniques can be used to let the sender of an electronic message know that a message was received: • Echo check • Trailer record • •
The sending unit stores control totals in a trailer tr ailer record. The receiving unit uses the information in those totals to verify the entire message was received.
PROCESSING INTEGRITY • Message Acknowledgment Techniques – A number of message acknowledgment techniques can be used to let the sender of an electronic message know that a message was received: • Echo check • Trailer record • Numbered batches • •
If a large message is transmitted in segments, each can be numbered sequentially. The receiving unit uses those numbers to properly assemble the segments.
PROCESSING INTEGRITY • 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
PROCESSING INTEGRITY • Output Controls – Careful checking of system output provides additional control over processing integrity. – Output controls include: • User review of output •
Users carefully examine output for reasonableness, completeness, and to assure they are the intended recipient.
PROCESSING INTEGRITY • Output Controls – Careful checking of system output provides additional control over • Periodically, all transactions and other system updates processing integrity. should be reconciled to control reports, file status/update reports, or other control mechanisms. – Output controls include: •
•
Control accounts should also be reconciled to User reviewaccount of output subsidiary totals.
• Reconciliation procedures
PROCESSING INTEGRITY • Output Controls – Careful checking of system output provides additional control over processing integrity. • Database totals should periodically be reconciled with data – Output maintained outsideinclude: the system. controls •
•
EXAMPLE: Compare number number of employee employee records in the User review of output payroll file to number in in the human resources file. file. (Excess records in payroll suggests a “ghost” employee.)
• Reconciliation procedures • External data reconciliation
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• Reliable systems are available for use whenever needed. • Threats to system availabi availability lity 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
AVAILABILITY • Proper controls can minimize the risk of significant system downtime caused by the preceding threats. • It is impossible to totally eliminate all threats. • Consequently, organizations must develop disaster recovery and business continuity plans to enable them to quickly resume normal operations after such an event.
AVAILABILITY • Minimizing Risk of System Downtime – Loss of system availability can cause significant financial losses, especially if the system affected is essential to e-commerce. – Organizations can take a variety of steps to minimize the risk of system downtime. • Physical and logical access controls (Chapter 7) can reduce the risk of successful denial-of-service denial-of-service attacks. • Good computer security reduces risk of theft or sabotage of IS resources.
AVAILABILITY – Preventive maintenance can reduce risk of hardware and software failure. Examples: • Cleaning disk drivers • Properly storing magnetic and optical media
– Use of redundant components can provide fault tolerance, tolerance, which enables the system to continue functioning despite failure of a component. Examples of redundant components: • Dual processors • Arrays of multiple hard drives.
AVAILABILITY – Surge protection devices provide protection against temporary power fluctuations. – An uninterruptible power supply (UPS) provides protection from a prolonged power outage and buys the system enough time to back up critical data and shut down safely.
AVAILABILITY • Risks associated with natural and man-made disasters can be reduced with proper location and design of rooms housing mission-critical servers and databases. – Raised floors protect from flood damage. – Fire protection and suppression devices reduce likelihood of 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.
AVAILABILITY • 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 safe email and web-browsing practices, can reduce risk of virus and worm infection.
• Anti-virus software should be installed, run, and kept current. • 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 that is isolated from the main network.
AVAILABILITY • Disaster Recovery and Business Continuity Planning – Disaster recovery and business continuity plans are essential if an organization hopes to survive a major catastrophe. – Being without an IS for even a short period of time can be quite costly—some report as high as half a million dollars per hour. – Yet many large U.S. companies do not have adequate disaster recovery and business continuity plans.
AVAILABILITY • The objectives of a disaster recovery and business 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 emergency operations
AVAILABILITY • Key components of effective disaster recovery and business continuity plans include: – Data backup procedures – Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) – Thorough documentation – Periodic testing – Adequate insurance
AVAILABILITY • Key components of effective disaster recovery and business continuity plans include: – Data backup procedures – Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) – Thorough documentation – Periodic testing – Adequate insurance
AVAILABILITY • Data Backup Procedures – Data need to be backed up regularly and frequently. – A backup is an exact copy of the most current version 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 restoration..
AVAILABILITY • Several different backup procedures exist. – A full backup is an exact copy of the data recorded on another physical media (tape, magnetic disk, CD, DVD, etc.) – Restoration involves bringing the backup copy online. – Full backups are time consuming, so most organizations: • Do full backups weekly • Supplement with daily partial backups.
AVAILABILITY • Two types of partial partial backups are possible: – Incremental backup • • •
Involves copying only the data items that have changed since the last backup. Produces a set of incremental backup files, each containing the results of one day’s transactions. Restoration: – First load the last full backup. – Then install each subsequent incremental backup in the proper sequence.
AVAILABILITY • Two types of partial partial backups are possible: – Incremental backup – Differential backup • • • •
All changes made since the last full backup are copied. c opied. Each new differential backup file contains the cumulative effects of all activity since the last full backup. Will normally take longer to do the backup than when incremental backup is used. Restoration: – First load the last full backup. – Then install the most recent differential backup file.
AVAILABILITY • Incremental and differential backups are both made daily. – Additional Additional intra-day backups are often made for mission-critical databases. – Periodical Periodically, ly, 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.
AVAILABILITY • 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
AVAILABILITY • 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.
AVAILABILITY • 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 and regulatory requirements. • Multiple copies of archives should be made and stored in different locations. • Appropriate security controls should also be applied to these files.
AVAILABILITY • Special attention should be paid to email, because it has become an important archive of organizational behavior and information. • Access to email is often important when companies are embroiled in lawsuits. • Organizations may be tempted to adopt a policy of periodically deleting all email to prevent a plaintiff’s attorney from finding a “smoking “ smoking gun.”
AVAILABILITY • 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.
AVAILABILITY • Key components of effective disaster recovery and business continuity plans include: – Data backup procedures – Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) – Thorough documentation – Periodic testing – Adequate insurance
AVAILABILITY • Infrastructure Replacement – Major disasters can totally destroy an organization’s information processing center or make it inaccessible. – A key component of disaster recovery and business continuity plans incorporates provisions for replacing the necessary 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 organization that uses similar equipment to have temporary access to and use of their 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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• Organizations have three basic • options for replacing computer and networking equipment. – Reciprocal agreements
AVAILABILITY • Organizations have three basic options for replacing computer and networking equipment. – Reciprocal agreements – 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.
AVAILABILITY •Most Organizations have three basic expensive solution but used by organizations like financial institutions andfor airlines which cannotcomputer survive any appreciable time options replacing and without there IS. • The hot site is a facility that is pre-wired for phone and Internet (like networking equipment. •
the cold site) but also contains the essential computing and office – Reciprocal agreements equipment. • It is a backup infrastructure designed to provide fault tolerance in the – Cold sites event of a major disaster.
– Hot sites
AVAILABILITY • Key components of effective disaster recovery and business continuity plans include: – Data backup procedures – Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) – Thorough documentation – Periodic testing – Adequate insurance
AVAILABILITY • 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 onsite and off-site.
AVAILABILITY • Key components of effective disaster recovery and business continuity plans include: – Data backup procedures – Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) – Thorough documentation – Periodic testing – Adequate insurance
AVAILABILITY • Testing – Periodic testing and revision is probably the most important component of effective disaster recovery and business continuity plans. • Most plans fail their initial test, because it’s impossible to anticipate everything that could go wrong. • The time to discover these problems is before the actual emergency and in a setting where the weaknesses can be carefully analyzed and appropriate changes made.
AVAILABILITY • 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 executing reciprocal agreements or hot or cold sites. – Backup restoration procedures also require practice.
AVAILABILITY • Brainstorming sessions involving mock scenarios can be effective in identifying gaps and shortcomings. – More realistic and detailed simulations or drills should also be performed, although not to the expense of completely performing every activity. – Experts recommend testing individual components of the plans separately, because it is too difficult and costly to simulate and analyze every aspect simultaneously.
• The plan documentation needs to be updated to reflect any changes in procedure made in response to problems identified during testing.
AVAILABILITY • Key components of effective disaster recovery and business continuity plans include: – Data backup procedures – Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) – Thorough documentation – Periodic testing – Adequate insurance
AVAILABILITY • Insurance – Organizations should acquire adequate insurance coverage to defray part or all of the expenses associated with implementing their disaster recovery and business continuity plans.
PROCESSING INTEGRITY • 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.
CHANGE MANAGEMENT CONTROLS • Organizations Organizations constantly modify their information systems to reflect new business practices and to take advantage of advances in IT. • Controls are needed to ensure such changes don’t negatively impact reliability. • Existing controls related to security, confidentiality, privacy, processing integrity, and availability should be modified to maintain their effectiveness after the change. • Change management controls need to ensure adequate segregation of duties is maintained in light of the modifications modificatio ns to the organizational structure and adoption of new software.
CHANGE MANAGEMENT CONTROLS • 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 o n reliability.
CHANGE MANAGEMENT CONTROLS – Changes should be thoroughly tested prior to implementation. • Includes assessing effect of change on all five principles of systems reliability. • Should occur in a separate, non-production environment.
– All documentation (program instructions, system descriptions, backup and disaster recovery plans) should be updated to reflect authorized changes to the system. – “Emergency” changes or deviations from policy must be documented and subjected to a formal review and approval process as soon after implementa implementation tion as practicable. All such actions actions should be logged logged to provide an audit trail.
CHANGE MANAGEMENT CONTROLS – “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 carefully monitored during the change process to ensure proper segregation of duties.
CHANGE MANAGEMENT CONTROLS • The most important change management control is adequate monitoring and review by top management to ensure that the changes are consistent with the entity’s multiyear strategic plan. • Objective: Be sure the system continues to effectively support the organization’s strategy. • Steering committees are often created to perform this function.
SUMMARY • In this chapter, you’ve learned about the controls used to protect the confidentiality of sensitive information and the controls used to protect the privacy of customer information. • You’ve also learned about controls that help ensure processing integrity. • Finally, you’ve learned about controls to ensure that the system is available when needed.
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.
CONFIDENTIALITY • Encryption alone is not sufficient to protect confidentiality. confidentia lity. 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 the actions (read, write, change, delete, copy, etc.) that authorized users can perform when accessing confidentiall information. confidentia
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 a ny application before leaving their workstation 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 fax machines. – Reports should be coded to reflect the importance of the information therein, and employees should be trained not to leave reports with sensitive information laying in plain p lain view.
CONFIDENTIALITY • It is especially important to control disposal of information resources. • Printed reports and microfilm with sensitive information should be shredded.
CONFIDENTIALITY • Special procedures are needed for information stored on magnet and optical media. – Using built-in operating system commands to delete the information does 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 media clean 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 demagnetize them. – The safest alternative may be to physically destroy disks with highly sensitive data.
CONFIDENTIALITY • Controls to protect confidentiality must be continuously reviewed and modified to respond to new threats created by technological advances. • Many organizations now prohibit visitors from using cell phones while touring their facilities because of the threat caused by cameras in these phones. • Because these devices are easy to hide, some organizations use jamming devices to deactivate their imaging systems while on company premises.
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.
CONFIDENTIALITY • Many organizations are taking steps to address the confidentiality threats created by email and IM. – One response is to mandate encryption of all email with sensitive information. – Some organizations prohibit prohibit use of freeware IM products and purchase commercial products with security features, including encryption. – Users sending emails must be trained to be very careful about the identity of their t heir addressee. • EXAMPLE: The organization organization may may have two employees employees named Allen Smith. It’s critical that sensitive information go go to the correct Allen Smith.
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• In the Trust Services framework, the privacy principle is closely related to the confidentiality principle. • Primary difference is that privacy focuses on protecting personal information about customers rather than organizational data. • Key controls for privacy are the same that were previously listed for confidentiality.
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 to protect the privacy of customer information.
PRIVACY • The Trust Services privacy framework of the AICPA and CICA lists ten internationa internationally lly recognized best practices for protecting the privacy of customers’ personal information: – Management •
•
The organization establishes a set of procedures and policies for protecting privacy of personal information it collects. Assigns responsibility and accountability for those policies to a specific person or group.
PRIVACY • The Trust Services privacy framework of the AICPA and CICA lists ten internationa internationally lly recognized best practices for protecting the privacy of customers’ personal information: – Management – Notice •
Provides notice about its policies and practices when it collects the information or as soon as practicable thereafter.
•
Describes the choices available to individuals and obtains their consent to the collection and use of their personal information. • Choices may differ across countries. • The Trust Services privacy framework of the AICPA and – U.S.—The default is “opt out,” i.e., CICA lists ten internationa internationally lly recognized best practices organizations can collect personal for protecting the privacy of customers’ information personal about customers information: unless the customer explicitly objects. – Management – Europe—The default is “opt in,” – Notice i.e., they can’t collect the – Choice and consent information unless customers explicitly give them permission. • Collection – The organization collects only that information needed to fulfill the purposes stated in its privacy policies.
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PRIVACY • The Trust Services privacy framework of the AICPA and CICA lists ten internationa internationally lly recognized best practices for protecting the privacy of customers’ personal information: – Management – Notice – Choice and consent – Collection •
The organization collects only that information needed to fulfill the purposes stated in its privacy policies.
PRIVACY • The Trust Services privacy framework of the AICPA and CICA lists ten internationa internationally lly recognized best practices for protecting the privacy of customers’ personal information: – Management – Notice – Choice and consent – Collection – Use and retention •
The organization uses its customers’ personal information only according to stated policy and retains that information only as long as needed.
PRIVACY • The Trust Services privacy framework of the AICPA and CICA lists ten internationa internationally lly recognized best practices for protecting the privacy of customers’ personal information: – Management – Notice – Choice and consent – Collection – Use and retention • The organization provides individuals – Access with the ability to access, review,
correct, and delete the personal information stored about them.
PRIVACY • The Trust Services privacy framework of the AICPA and CICA lists ten internationa internationally lly recognized best practices for protecting the privacy of customers’ personal information: – Management – Notice – Choice and consent – Collection – Use and retention – Access
•
The organization discloses customers’ personal information to third parties only per stated policy and only to third parties who provide equivalent protection.
– Disclosure to Third Parties
•
The organization takes reasonable steps to protect customers’ personal information from loss or unauthorized disclosure. • Issues that are sometimes overlooked: – Disposal of computer equipment • Should follow the suggestions presented on section regarding • The protection Trust Services privacy framework of the AICPA and of confidentiality. internationally lly recognized best practices –CICA Emaillists ten internationa for•protecting privacy of customers’ If you sendthe emails to a list of recipients,personal each recipient information: typically knows who the other recipients are. – •Management If the email regards a private issue, e.g., perhaps it pertains to their AIDS treatment, then the privacy of all recipients r ecipients has – Notice been violated. – Choice and consent One remedy might be to address the recipients on the “bcc” – •Collection line of the email, rather than as original addresses. – Use and retention – Release of electronic documents. – Access • When physical documents are exchanged, sometimes – Disclosure to Third Parties portions are blacked out (redacted) to protect privacy. – Security • Similar procedures are needed for the exchange of electronic documents.
PRIVACY
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 – Disclosure to Third Parties – Security • The organization maintains the – Quality
integrity of its customers’ personal information.
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
• The organization assigns one or more – Choice and consent employees to be responsible for – Collection assuring and verifying compliance – Use and retention – Access •
with its stated policies. Also provides for procedures to respond to customer complaints, – Disclosure to Third Parties including third-party dispute – Security resolution processes. – Quality
– Monitoring and enforcement
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 personal information transmitted between individuals and the organization’ organization’s s website. – However, SSL only protects the information in transit. – Consequently, Consequently, strong authenticati authentication on controls are needed to restrict website visitors’ access to individual accounts.
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 in storage.
PRIVACY • Concerns about privacy appear to be increasing. One topic of concern is cookies. – A cookie is a text file created by a website and stored on a visitor’s hard drive. drive. It records what the the visitor visitor has done on the site. – Most websites create multiple cookies per visit to make it easier 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 violate privacy rights.
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.
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 the law. – Applies to commercial email, which is any email with a primary purpose of advertising or promotion. – Covers most legitimate email sent by organizations to customers, suppliers, or donors to non-profits.
PRIVACY • Consequently, Consequently, organizations must carefully follow the CAN-SPAM guidelines, which include: – The sender’s identity must be clearly displayed in the
message header.
PRIVACY • Consequently, Consequently, organizations must carefully follow the CAN-SPAM guidelines, which include: – The sender’s 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.
PRIVACY • Consequently, Consequently, organizations must carefully follow the CAN-SPAM guidelines, which include: – The sender’s 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. – 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 out” request to ensure they do not send additional unsolicited email to that address. • Means someone must be assigned responsibility for processing these requests.
PRIVACY • Consequently, Consequently, organizations must carefully follow the CAN-SPAM guidelines, which include: – The sender’s 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. – The body must provide recipients with a working link that can be used to “opt out” of future email. – The body must include the sender’s valid postal address. •
Best practice (not required) would be to provide full street address, telephone, and fax numbers.
PRIVACY • Consequently, Consequently, organizations must carefully follow the CAN-SPAM guidelines, which include: – The sender’s 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. – The body must provide recipients with a working link that can be used to “opt out” of future email. – The body must include the sender’s valid postal address. – Organizations should not: • Send email to randomly generated addresses. • Set up websites designed to harvest email addresses of
potential customers.
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 privacy framework that provides detailed information on how organizations can comply with CAN-SPAM and other domestic and international regulations.
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 organization’s business activity
PRIVACY • Another privacy-related issue that is of growing concern is identity theft. – Organizations Organizations have an ethical and moral obligation to implement controls to protect databases that contain their customers’ personal information.
PRIVACY • Steps that individuals can take to minimize the risk r isk of becoming a victim of identity theft include: – Shred all documents that contain personal information, especially unsolicited 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 won’t ask for your security code. • The IRS won’t email you for identifying information in response to an audit.
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. – Don’t carry more than a few blank checks with you. – Use special software to thoroughly clean any digital media before disposal, disposal, or physically destroy the media. media. It is especially important to thoroughly erase or destroy hard drives before donating or disposing of equipment.
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 driver’s licenses, passports, and credit cards. Store them with phone numbers for 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.
PROCESSING INTEGRITY SYSTEMS RELIABILITY
DI F N O C
Y TI L AI T N E
C A VI R P
G E T NI
Y
E C O R P
G NI S S
SECURITY
Y TI R Y TI LI B A LI A V A
• A reliable system produces information that is accurate, timely, reflects results of only authorized transactions, and includes outcomes of all activities engaged in by the organization during a given period of time. • Requires controls over both data input quality and the processing of the data.
PROCESSING INTEGRITY • 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
PROCESSING INTEGRITY • 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
PROCESSING INTEGRITY • Source Data Controls – If the data entered into a system is inaccurate or incomplete, the output output will 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.
PROCESSING INTEGRITY • The following source data controls regulate r egulate integrity of input: – Forms design •
Source documents and other forms should be designed to help ensure that errors and omissions are minimized (Chapter 18).
PROCESSING INTEGRITY • The following source data controls regulate r egulate integrity of input: – Forms design – Pre-numbered forms sequence test • •
Pre-numbering helps verify that no items are missing. When sequentially pre-numbered source data documents are used, the system should be programmed to identify and report missing or duplicate form numbers.
PROCESSING INTEGRITY • The following source data controls regulate r egulate integrity of input: – Forms design – Pre-numbered forms sequence test – Turnaround documents •
• •
Documents sent to external parties that are prepared in machine-readable form to facilitate their subsequent processing as input records. Example: the stub that is returned by a customer when paying a utility bill. Are more accurate than manually-prepared input records.
PROCESSING INTEGRITY • Documents that have been entered should be •
canceled – Paper documents are stamped “paid” or The following source data controls regulate r egulate otherwise defaced flag field is set on electronic documents. integrity –ofAinput: • Canceling – Forms design documents does not mean destroying documents. – Pre-numbered forms sequence test • They should be retained as long as needed to satisfy – Turnaround documents legal and regulatory requirements.
– Cancellation and storage of documents
PROCESSING INTEGRITY • The following source data controls regulate r egulate integrity of input: – Forms design – Pre-numbered forms sequence test – Turnaround documents – Cancellati Cancellation on and storage of documents – Authorization and segregation of duties • •
Source documents should be prepared only by authorized personnel acting within their authority. Employees who authorize documents should not be assigned incompatible functions.
PROCESSING INTEGRITY • The following source data controls regulate r egulate integrity of input: – Forms design – Pre-numbered forms sequence test – Turnaround documents – Cancellati Cancellation on and storage of documents – Authorization and segregation of duties – Visual scanning •
Documents should be scanned for reasonableness and propriety.
PROCESSING INTEGRITY • The following source data controls regulate r egulate • An additional digit called a check digit can be integrity appended of input:to account numbers, policy numbers, n umbers, ID – Forms numbers, design etc. • Data entry devices then perform check digit – Pre-numbered forms sequence test digits in the number verification by using the original – Turnaround to recalculate the check digit. documents • If the check digit does not match the – Cancellati Cancellation onrecalculated and storage of documents
digit recorded on the source document, that result – Authorization and duties suggests thatsegregation an error wasof made in recording or the number. – Visual entering scanning
– Check digit verification
PROCESSING INTEGRITY • The following source data controls regulate r egulate integrity of input: – Forms design – Pre-numbered forms sequence test – Turnaround • Many documents businesses are replacing bar codes and manual tagsstorage with radio identification – Cancellati Cancellation on and of frequency documents (RFID) tags that can store up to 128 bytes of data. – Authorization and segregation of duties •
These tags should be write-protected so that – Visual scanning unscrupulous customers cannot change price on merchandise. – Check information digit verification
– RFID security
PROCESSING INTEGRITY • 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
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check • •
Determines if the characters in a field are of the proper type. Example: The characters in a social security security field should all be numeric.
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check • •
Determines if the data in a field have the appropriate arithmetic sign. Example: The number of hours a student is enrolled in during a semester could not be a negative number.
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check – Limit check • •
Tests whether an amount exceeds a predetermined value. Example: A university might use a limit check to make sure that the hours a student is enrolled in do not exceed 21.
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – 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 the minimum wage rate.
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check – Limit check – Range check – Size (or capacity) check • •
Ensures that the data will fit into the assigned field. Example: A social security number number of 10 digits would not fit in the 9-digit social security field.
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check – Limit check – Range check – Size (or capacity) check – Completeness check • •
Determines if all required items have been entered. Example: Has the student’s billing address been entered along with enrollment details?
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check – Limit check – Range check – Size (or capacity) check – Completeness check – Validity check • •
Compares the value entered to a file of acceptable values. Example: Does the state code entered for an address
PROCESSING INTEGRITY • Once data is collected, data entry control procedures are needed to ensure that it’s it’s entered correctly. Common tests to validate input include: – Field check – Sign check – Limit check – Range • check Determines whether a logical relationship seems to – Size (or be capacity) check correct. – Completeness check • Example: A freshman with annual annual financial aid of $60,000 is probably not reasonable. – Validity check – Reasonableness test
PROCESSING INTEGRITY • 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.
PROCESSING INTEGRITY • Records information about data input or processing •
errors (when they occurred, cause, when they were corrected and resubmitted). Additional Batch Processing Data Entry • Errors should be investigated, corrected, and resubmitted on a timely basis (usually with the next Controls batch) and subjected to the same input validation v alidation – In addition to the preceding controls, when routines. • batch using the periodically following to data The log processing, should be reviewed ensure that all errors have been corrected and then used to entry controls should be incorporated. prepare an error report, summarizing errors by • Sequence check record type, error type, cause, and disposition.
• Error log
PROCESSING INTEGRITY • Summarize key values for a batch of input records. •
Commonly used batch totals include: – Financial totals—sums of fields that contain dollar Additional Batch Processing Data Entry values, such as total sales. Controls – Hash totals—sums of nonfinancial fields, such as the sum of all social security numbers of – In addition to the preceding employees being paid. controls, when using batch processing, the data – Record count—count of following the number of records in a batch. entry controls should be incorporated. • These batch totals are calculated and recorded when • Sequence check data is entered and used later to verify that all input • Errorwas log processed correctly.
• Batch totals
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data •
•
Whenever possible, the system should automatically enter transaction data, such as next available document number or new ID number. Saves keying time and reduces errors.
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting •
System requests each input item and waits for an acceptable response.
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting • Pre-formatting •
Fields that need to be completed are highlighted.
PROCESSING INTEGRITY • Additional online data entry controls – Online processing data entry controls include: • Automatic entry of data • Prompting • Pre-formatting • Closed-loop verification • •
Checks accuracy of input data by retrieving related information. Example: When a customer’s account account number number is entered, the associated customer’s name is displayed on the screen so the user can verify that entries are being made for the correct account.
