C
HAPTER 8
Information Systems Controls
for System Reliability
Part 2: Confidentiality, Privacy,
Processing Integrity, and
Availability
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INTRODUCTION
• Questions to be addressed in this chapter
include:
– What controls are used to protect the confidentiality of
sensitive information?
– What controls are designed to protect privacy of
customers’ personal information?
– What controls ensure processing integrity?
– How are information systems changes controlled to
ensure that the new system satisfies all five principles
of systems reliability?
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INTRODUCTION
• Reliable systems satisfy
five principles:
AVAILABILITY
PROCESSING INTEGRITY
PRIVACY
CONFIDENTIALITY
SYSTEMS
RELIABILITY
– Information Security
(discussed in Chapter 7)
– Confidentiality
– Privacy
– Processing integrity
– Availability
SECURITY
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CONFIDENTIALITY
AVAILABILITY
PROCESSING INTEGRITY
PRIVACY
CONFIDENTIALITY
SYSTEMS
RELIABILITY
 Reliable systems
maintain the
confidentiality of
sensitive information.
SECURITY
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CONFIDENTIALITY
• Maintaining confidentiality requires that
management identify which information is
sensitive.
• Each organization will develop its own
definitions of what information needs to be
protected.• COBIT control objective PO 2.3 specifies the
need to identify and to properly label potentially
• Most definitions
will include:
sensitive information, to assign responsibility for
–
–
–
–
Business plans
its protection, and to implement appropriate
controls.
Pricing strategies
Client and customer lists
Legal documents
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CONFIDENTIALITY
 Table 8-1 in your textbook summaries key
controls to protect confidentiality of information:
Situation
Storage
Controls
Encryption and access controls
Transmission
Disposal
Encryption
Shredding, thorough erasure, physical
destruction
Overall
Categorization to reflect value and training
in proper work practices
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CONFIDENTIALITY
• Encryption is a fundamental control procedure
for protecting the confidentiality of sensitive
information.
• Confidential information should be encrypted:
– While stored
– Whenever transmitted
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CONFIDENTIALITY
• The Internet provides inexpensive transmission,
but data is easily intercepted.
• Encryption solves the interception issue.
• If data is encrypted before sending it, a virtual
private network (VPN) is created.
– Provides the functionality of a privately owned
network
– But uses the Internet
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CONFIDENTIALITY
• Use of VPN software creates private
communication channels, often referred to as
tunnels.
– The tunnels are accessible only to parties who have
the appropriate encryption and decryption keys.
accordance with COBIT DS 5.11, VPNs include
– Cost of •theInVPN
software is much less than costs of
controls to authenticate the parties exchanging
leasing or information
buying a privately-owned,
secure
and to create an audit
trail of the
communications
network.
exchange.
– Also, makes it much easier to add or remove sites
from the “network.”
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VPN Example
Pixar - Computer Animation Studio
Pixar, an Academy Award-winning computer animation studio with technical,
creative and production capabilities, develops well-known computer-animated
feature films. In addition to its headquarters in Richmond, California, Pixar has
six branch offices with always-on broadband Internet connections that require
firewall security to protect the computers on their private networks and virtual
private networking connectivity to allow secure communications with
headquarters. A SonicWALL unit at each branch office provides Pixar with
firewall security. With the SonicWALL virtual private networking upgrade at each
branch office and Check Point Software's Firewall-1 at headquarters, Pixar has
created a secure distributed network that allows employees in different offices
to collaborate on projects and to disseminate confidential information securely
over the Internet throughout the enterprise.
- Ray Davis, Pixar
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CONFIDENTIALITY
• It is critical to encrypt any sensitive information
stored in devices that are easily lost or stolen,
such as laptops, PDAs, cell phones, and other
portable devices.
– Many organizations have policies against storing
sensitive information on these devices.
– 81% of users admit they do so anyway.
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CONFIDENTIALITY
• Encryption alone is not sufficient to protect
confidentiality. Given enough time, many encryption
schemes can be broken.
• Access controls are also needed:
– To prevent unauthorized parties from obtaining the encrypted
data; and
– Because not all confidential information can be encrypted in
storage.
• Strong authentication techniques are necessary.
• Strong authorization controls should be used to limit the
actions (read, write, change, delete, copy, etc.) that
authorized users can perform when accessing
confidential information.
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CONFIDENTIALITY
• Access to system outputs should also be controlled:
– Do not allow visitors to roam through buildings unsupervised.
– Require employees to log out of any application before leaving
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 view.
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CONFIDENTIALITY
• It is especially important to control
disposal of information resources.
• Printed reports and microfilm with
sensitive information should be shredded.
• COBIT control objective DS 11.4 addresses the
need to define and implement procedures
governing the disposal of sensitive data and any
hardware on which that data was stored.
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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.
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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.
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CONFIDENTIALITY
• Phone conversations have also been affected by
technology.
• The use of voice-over-the-Internet (VoIP)
technology means that phone conversations are
routed in packets over the Internet.
– Because this technology makes wiretapping much
easier, conversations about sensitive topics should be
encrypted.
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CONFIDENTIALITY
• Employee use of email and instant messaging
(IM) probably represents two of the greatest
threats to the confidentiality of sensitive
information.
– It is virtually impossible to control its distribution once
held by the recipient.
– Organizations 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.
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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 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 addressee.
• EXAMPLE: The organization may have two employees
named Allen Smith. It’s critical that sensitive information go to
the correct Allen Smith.
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PRIVACY
AVAILABILITY
PROCESSING INTEGRITY
PRIVACY
CONFIDENTIALITY
SYSTEMS
RELIABILITY
• 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.
SECURITY
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PRIVACY
• COBIT section DS 11 addresses the
management of data and specifies the need to
comply with regulatory requirements.
• 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.
• Apple’s Privacy Statement, Disney
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PRIVACY
• The Trust Services privacy framework of the AICPA and
CICA lists ten internationally recognized best practices
for protecting the privacy of customers’ personal
information:
– Management
• The organization establishes a set of procedures
and policies for protecting privacy of personal
information it collects.
• Assigns responsibility and accountability for
those policies to a specific person or group.
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PRIVACY
• The Trust Services privacy framework of the AICPA and
CICA lists ten internationally recognized best practices
for protecting the privacy of customers’ personal
information:
– Management
– Notice
• Provides notice about its policies and practices
when it collects the information or as soon as
practicable thereafter.
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• 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
– United States—The default is “opt
CICA lists ten internationally
recognized best practices
out,” i.e., organizations can collect
for protecting the privacy of customers’
personalabout
personal information
information:
customers 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.
PRIVACY
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PRIVACY
• The Trust Services privacy framework of the AICPA and
CICA lists ten internationally recognized best practices
for protecting the privacy of customers’ personal
information:
–
–
–
–
Management
Notice
Choice and consent
Collection
• 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 internationally 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.
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PRIVACY
• The Trust Services privacy framework of the AICPA and
CICA lists ten internationally recognized best practices
for protecting the privacy of customers’ personal
information:
–
–
–
–
–
–
Management
Notice
Choice and consent
Collection
Use and retention
• The organization provides individuals
Access
with the ability to access, review,
correct, and delete the personal
information stored about them.
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PRIVACY
• The Trust Services privacy framework of the AICPA and
CICA lists ten internationally recognized best practices
for protecting the privacy of customers’ personal
information:
–
–
–
–
–
–
–
Management
Notice
• The organization discloses customers’
personal information to third parties
Choice and consent
only per stated policy and only to third
Collection
parties who provide equivalent
Use and retention
protection.
Access
Disclosure to Third Parties
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• 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.
–CICA
Emaillists ten internationally recognized best practices
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 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
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PRIVACY
• The Trust Services privacy framework of the AICPA and CICA
lists ten internationally recognized best practices for
protecting the privacy of customers’ personal information:
–
–
–
–
–
–
–
–
–
Management
Notice
Choice and consent
Collection
Use and retention
Access
Disclosure to Third Parties
Security • The organization maintains the
integrity of its customers’ personal
Quality
information.
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PRIVACY
• The Trust Services privacy framework of the AICPA and CICA
lists ten internationally recognized best practices for
protecting the privacy of customers’ personal information:
–
–
–
–
–
–
–
–
–
–
Management
Notice
• The organization assigns one or more
Choice and consent
employees to be responsible for
Collection
assuring and verifying compliance
Use and retention with its stated policies.
Access
• Also provides for procedures to
respond to customer complaints,
Disclosure to Third Parties
including third-party disputeSecurity
resolution processes.
Quality
Monitoring and enforcement
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PRIVACY
• As with confidentiality, encryption and access
controls are the two basic mechanisms for
protecting consumers’ personal information.
– It is common practice to use SSL to encrypt all
personal information transmitted between individuals
and the organization’s Website.
– However, SSL only protects the information in transit.
– Consequently, strong authentication controls are
needed to restrict Website visitors’ access to
individual accounts.
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PRIVACY
• Organizations should consider encrypting
customers’ personal information in
storage.
– May be economically justified, because some
California
SB 1386
effectively requires
companies
state• laws
require
companies
to notify
all
to notify all their customers whenever a security
customers
of security incidents.
incident may have led to the compromise of
personally identifiable
– The notification
processinformation.
is costly but may be
waived if the information was encrypted while
in storage.
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PRIVACY
• Organizations need to train employees on how
to manage personal information collected from
customers.
– Especially important for medical and financial
information.
– Intentional misuse or unauthorized disclosure can
have serious economic consequences, including:
• Drop in stock price
• Significant lawsuits
• Government suspension of the organization’s business
activity
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PRIVACY
• One topic of concern is cookies used on Web
sites.
– A cookie is a text file created by a Website and stored
on a visitor’s hard drive. It records what the 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.
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PRIVACY
• Another privacy-related issue that is of growing
concern is identity theft. video
– Organizations have an ethical and moral obligation to
implement controls to protect databases that contain
their customers’ personal information.
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PRIVACY
• Steps that individuals can take to minimize the risk of
becoming a victim of identity theft include:
– Shred all documents that contain personal information,
especially unsolicited credit card offers. Cross-cut shredders are
more effective.
– Never send personally identifying information in unencrypted
email.
– Beware of email, phone, and print requests to “verify” personal
information that the requesting party should already possess.
• Credit card companies won’t ask for your security code.
• The IRS won’t email you for identifying information in
response to an audit.
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PRIVACY
– Do not carry your social security card with you or comply
with requests to reveal the last 4 digits.
– Limit the amount of identifying information preprinted on
checks and consider eliminating it.
– Do not place outgoing mail with checks or personal
information in your mailbox for pickup.
– Don’t carry more than a few blank checks with you.
– Use special software to thoroughly clean any digital media
before disposal, or physically destroy the media. It is
especially important to thoroughly erase or destroy hard
drives before donating or disposing of equipment.
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PRIVACY
– Monitor your credit reports regularly.
– File a police report as soon as you discover that your
purse or wallet was stolen.
– Make photocopies of driver’s licenses, passports, and
credit cards. Store them with phone numbers for all the
credit cards in a safe location to facilitate notifying
authorities if they are stolen.
– Immediately cancel any lost or stolen credit cards.
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PRIVACY
• A related concern involves the
overwhelming volume of spam.
– Spam is unsolicited email that contains either
advertising or offensive content.
• Reduces the efficiency benefits of email.
• Is a source of many viruses, worms, spyware, and
other malicious content.
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PRIVACY
• In 2003, the U.S. Congress passed the
Controlling the Assault of Non-Solicited
Pornography and Marketing (CAN-SPAM)
Act.
– Provides criminal and civil penalties for violation of
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.
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PRIVACY
• Consequently, organizations must carefully follow the
CAN-SPAM guidelines, which include:
– The sender’s identity must be clearly displayed in the
message header.
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PRIVACY
• 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.
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PRIVACY
• 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.
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PRIVACY
• 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.
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PRIVACY
• 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: that organizations redesign their
• Experts
recommend
• Sendown
email
to randomly
generated
addresses.
Websites
to include
a visible
means for visitors
to Websites
“opt in” todesigned
receive email.
• Set up
to harvest email addresses of
potential customers.
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PROCESSING INTEGRITY
• COBIT control objective
SECURITY
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AVAILABILITY
PROCESSING INTEGRITY
PRIVACY
CONFIDENTIALITY
SYSTEMS
RELIABILITY
DS 11.1 addresses the
need for controls over the
input, processing, and
output of data.
• Identifies six categories of
controls that can be used
to satisfy that objective.
• Six categories are grouped
into three for discussion.
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PROCESSING INTEGRITY
• Three categories/groups of integrity
controls are designed to meet the
preceding objectives:
– Input controls
– Processing controls
– Output controls
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PROCESSING INTEGRITY
• Three categories of integrity controls are
designed to meet the preceding
objectives:
– Input Controls
– Processing controls
– Output controls
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PROCESSING INTEGRITY
• Input Controls
– If the data entered into a system is inaccurate or
incomplete, the output will be, too. (Garbage in 
garbage out.)
– Companies must establish control procedures to
ensure that all source documents are authorized,
accurate, complete, properly accounted for, and
entered into the system or sent to their intended
destination in a timely manner.
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PROCESSING INTEGRITY
• The following input controls regulate integrity of
input:
– Forms design
• Source documents and other forms should be
designed to help ensure that errors and omissions
are minimized (Chapter 18).
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PROCESSING INTEGRITY
• The following input controls regulate integrity of
input:
– Forms design
• Pre-numbered forms sequence test
• Pre-numbering helps verify that no items are
missing.
• When sequentially pre-numbered input
documents are used, the system should be
programmed to identify and report missing or
duplicate form numbers.
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PROCESSING INTEGRITY
• The following input controls regulate 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.
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PROCESSING
INTEGRITY
• Documents that have been
entered should be
•
canceled
– Paper documents are stamped “paid” or
The following
inputdefaced
controls regulate integrity of
otherwise
input: – A flag field is set on electronic documents.
• 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
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PROCESSING INTEGRITY
• The following input controls regulate integrity of
input:
– Forms design
• Pre-numbered forms sequence test
• Turnaround documents
– Cancellation 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.
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PROCESSING INTEGRITY
• The following input controls regulate integrity of
input:
–
–
–
–
–
–
Forms design
Pre-numbered forms sequence test
Turnaround documents
Cancellation and storage of documents
Authorization and segregation of duties
Visual scanning
• Documents should be scanned for reasonableness
and propriety.
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PROCESSING INTEGRITY
• The following
input
regulate
• An additional
digitcontrols
called a check
digit can be
to account numbers, policy numbers, ID
integrityappended
of input:
numbers, etc.
Forms
design
• Data
entry devices then perform check digit
verification by using the original digits in the number
Pre-numbered
forms sequence test
to recalculate the check digit.
Turnaround
documents
• If the recalculated
check digit does not match the
digit recorded on the source document, that result
Cancellation
storage
documents
suggests and
that an
error wasof
made
in recording or
entering the
number.
Authorization
and
segregation of duties
• Example – do with AIS book 0-13-601518-2
–
–
–
–
–
– Visual
scanning
• 0*10
+ 1*9 + 3*8 + 6*7 + 0*6 + 1*5 + 5*4 + 1*3 + 8*2 + 2*1 =
this is divisible by 11
– Check121;
digit
verification
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PROCESSING INTEGRITY
• The following input controls regulate integrity of
input:
–
–
–
–
–
–
–
–
Forms design
Pre-numbered forms sequence test
Turnaround
• Many documents
businesses are replacing bar codes and manual
tags with
radio
frequency
identification (RFID) tags
Cancellation
and
storage
of documents
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
• video
RFID security
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PROCESSING INTEGRITY
Three categories of integrity controls are
designed to meet the preceding
objectives:
– Input controls
• Data entry controls
– Processing controls
– Output controls
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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 field
should all be numeric.
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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.
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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.
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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.
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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 of 10 digits would
not fit in the 9-digit social security field.
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PROCESSING INTEGRITY
• 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?
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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
match one of the 50 valid state codes?
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
needed to ensure that 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 financial aid of
$60,000 is probably not reasonable.
Validity check
Reasonableness test
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PROCESSING INTEGRITY
• Once data is collected, data entry control procedures are
• An additional digit called a check digit can be
needed toappended
ensure that
it’s entered correctly. Common
to account numbers, policy numbers, ID
tests to validate
input
numbers,
etc.include:
–
–
–
–
–
–
–
–
–
Field •check
Data entry devices then perform check digit
Sign check
verification by using the original digits in the number
to recalculate the check digit.
Limit check
• check
If the recalculated check digit does not match the
Range
recorded
Size (or digit
capacity)
checkon the source document, that result
suggests that an error was made in recording or
Completeness check
entering the number.
Validity check
Reasonableness test
Check digit verification
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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.
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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.
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PROCESSING
INTEGRITY
• Records information about data input or processing
errors (when they occurred, cause, when they were
corrected and resubmitted).
• Errors should be investigated, corrected, and
resubmitted on a timely basis (usually with the next
Controls
batch) and subjected to the same input validation
– In addition
to the preceding controls, when
routines.
• batch
The log processing,
should be reviewed
ensure
using
the periodically
following to
data
that all errors
have been
corrected and then used to
entry controls
should
be incorporated.
prepare an error report, summarizing errors by record
• Sequence
check
type, error
type, cause, and disposition.
• Additional Batch Processing Data Entry
• Error log
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PROCESSING
INTEGRITY
• Summarize key values for a batch of input records.
Commonly used batch totals include:
– Financial totals—sums of fields that contain dollar
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
following
data
– Record
count—count
of 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.
• Additional Batch Processing Data Entry
• Batch totals
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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.
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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.
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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.
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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 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.
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• Maintains a detailed record of all transaction data,
including:
– A unique transaction identifier
– Date and time of entry
– Terminal from which entry is made
– Transmission line
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
PROCESSING INTEGRITY
• Additional online data entry controls
–
• Transaction logs
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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.
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PROCESSING INTEGRITY
• Three categories of integrity controls are
designed to meet the preceding
objectives:
– input controls
– Processing controls
– Output controls
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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 billed on the vendor invoice
must match the quantity ordered on the purchase
order and the quantity received on the receiving
report.
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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.
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• Batch totals should be recomputed as processing takes place.
• These totals should be compared to the totals in the trailer record.
• Discrepancies indicate processing errors, such as:
– If the recomputed record count is smaller than the original count,
one or more records were not processed.
– If the recomputed record count is larger than the original, then
unauthorized
transactions
were
processed
–additional
Processing
controls
to ensure
that
data isor some
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
PROCESSING INTEGRITY
• Processing Controls
• Recalculation of batch totals
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PROCESSING INTEGRITY
• Processing Controls
– Processing controls to ensure that data is
processed correctly include:
•
•
•
•
Data matching
File labels
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.
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PROCESSING INTEGRITY
• Processing Controls
– Processing controls to ensure that data is
processed correctly include:
•
•
•
•
•
Data matching
File labels
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.
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PROCESSING INTEGRITY
• Processing Controls
– Processing controls to ensure that data is
processed correctly include:
••
•
•
•
•
•
•
Data
Manymatching
businesses are replacing bar codes and manual
tagslabels
with radio frequency identification (RFID) tags
File
that can store up to 128 bytes of data.
Recalculation of batch totals
These tags should be write-protected so that
Cross-footing
balance test
unscrupulous customers
cannot change price
information on merchandise.
Write-protection
mechanisms
RFID security
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PROCESSING INTEGRITY
• Database systems use database administrators, data
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
of batch totals
being updated by two users simultaneously.
• Cross-footing
balance
testuntil the other has finished
– Locks one
user out
processing.
• Write-protection
mechanisms
• Processing Controls
–
• Database processing integrity procedures
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PROCESSING INTEGRITY
• Three categories of integrity controls are
designed to meet the preceding
objectives:
– Input controls
– Processing controls
– Output controls
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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.
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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
or other control mechanisms.
– Output
controlsreports,
include:
• Control accounts should also be reconciled to
User
reviewaccount
of output
subsidiary
totals.
•
• Reconciliation procedures
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PROCESSING INTEGRITY
• Output Controls
– Careful checking of system output
provides additional control over
processing integrity.
• Database totals should periodically be reconciled with data
– Output
controls
maintained
outsideinclude:
the system.
•
EXAMPLE: Compare number of employee records in the
• User
review
of output
payroll
file to number
in the human resources file. (Excess
records in payroll suggests a “ghost” employee.)
• Reconciliation
procedures
• External data reconciliation
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PROCESSING INTEGRITY
• Output 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: skip
• Parity checking
• Message acknowledgment techniques
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AVAILABILITY
AVAILABILITY
PROCESSING INTEGRITY
PRIVACY
CONFIDENTIALITY
SYSTEMS
RELIABILITY
• Reliable systems are available
for use whenever needed.
• Threats to system availability
originate from many sources,
including:
–
–
–
–
–
Hardware and software failures
Natural and man-made disasters
Human error
Worms and viruses
Denial-of-service attacks and
other sabotage
SECURITY
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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.
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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
attacks.
• Good information security reduces risk of theft or
sabotage of IS resources.
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AVAILABILITY
– COBIT control objective DS 13.5 identifies the
need for preventive maintenance. Examples:
• Cleaning disk drivers
• Properly storing magnetic and optical media
– Use of redundant components can provide
fault tolerance, which enables the system to
continue functioning despite failure of a
component. Examples of redundant
• components:
Surge protection devices provide protection
against temporary power fluctuations.
• Dual processors
• Arrays of multiple hard drives.
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AVAILABILITY
• COBIT control objectives DS 12.1 and 12.4
address the importance of 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.
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AVAILABILITY
– 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.
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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
• Ccurrent.
OBIT control objective DS 13.1 stresses the
kept
importance of defining and documenting
• Email should be scanned for viruses at both the
operational procedures and ensuring that
server
and desktop levels.
operations staff understand their
• Newly
acquired software and disks, CDs, or
responsibilities.
DVDs should be scanned and tested first on a
machine that is isolated from the main network.
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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 which
period of
Experience
suggests
that
companies
experience
major
disaster resulting
in loss
of
time
can be aquite
costly—some
report
as high
of atheir
information
system
for more than a
asuse
half
million
dollars per
hour.
fewmany
days large
have aU.S.
greater
than 50%do
chance
of
– Yet
companies
not have
going outdisaster
of business.
adequate
recovery and business
continuity plans.
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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
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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
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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
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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. It is intended for use in
the event of a hardware or software failure.
– The process of installing the backup copy for
use is called restoration.
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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.
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AVAILABILITY
• Two types of 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.
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AVAILABILITY
• Two types of partial backups are
possible:
– Incremental backup
– Differential backup
• All changes made since the last full backup are copied.
• 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.
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AVAILABILITY
• Incremental and differential backups are both
made daily.
– Additional intra-day backups are often made for
mission-critical databases.
– Periodically, the system makes a copy of the
database at that point in time, called a checkpoint,
and stores the copy on backup media.
– If a hardware or software fault interrupts processing,
the checkpoint is used to restart the system.
– The only transactions that need to be reprocessed
are those that occurred since the last checkpoint.
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AVAILABILITY
• Whichever backup procedure is used,
multiple backup copies should be created:
– One can be stored on-site for use in minor
incidents.
(maintaining
two copies
the database
at two
–• AtMirroring
least one
additional
copy ofshould
be stored
separate data centers) is an alternative to these traditional
off-site
to be safe should a disaster occur
backup methods. Mirroring is used by financial institutions
and airlines, that cannot afford to lose transactions.
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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.
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AVAILABILITY
• • Tape
or disk?are
Diskretained
backup is faster
and disks
are less
easily
Backups
for only
a fixed
period
oflost.
Tape, however, is cheaper, easier to transport, and more durable.
time.
Many organizations use both. Data is first backed up to disk, for
and then transferred
Archives aremaster
usually stored
• speed,
An archive
is a copytooftape.
a database,
file, on
tape.
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.
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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 gun.”
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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.
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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
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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
• How the
much
time can the
organization
afford to be without
its
necessary
computing
infrastructure,
including:
information
system? The recovery time objective (RTO) represents
• Computers
the time
following
a disaster
byaccess
which the organization’s information
• Network
equipment
and
system must be available again .
• 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.
AVAILABILITY
• Organizations have three basic
options for replacing computer and
networking equipment.
– Reciprocal agreements
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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.
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AVAILABILITY
• Organizations have three basic
options for replacing computer and
networking equipment.
• Most expensive solution but used by organizations like financial
institutions and airlines which cannot survive any appreciable time
without there IS.
• The hot site is a facility that is pre-wired for phone and Internet (like
the cold site) but also contains the essential computing and office
equipment.
• It is a backup infrastructure designed to provide fault tolerance in
Cold
the–event
of asites
major disaster.
– Reciprocal agreements
– Hot sites
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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
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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
on-site and off-site.
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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
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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.
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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.
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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.
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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
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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.
– MIT Business Continuity Plan
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CHANGE MANAGEMENT CONTROLS
• 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 to the organizational structure and
adoption of new software.
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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 reliability.
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CHANGE MANAGEMENT CONTROLS
– Changes should be thoroughly tested prior to
• When changing systems, data from old files and
implementation.
are entered
new data
• databases
Includes assessing
effectinto
of change
on structures.
all five principles of
systems reliability.
• Conversion
controls help ensure that the new data
• storage
Should occur
in are
a separate,
non-production environment.
media
free of errors.
– All
documentation
(program
system
• Old
and new systems
shouldinstructions,
be run in parallel
at
descriptions,
backup
and
disastertorecovery
least once and
results
compared
identify plans)
should
be updated to reflect authorized changes to
discrepancies.
the system.
• Internal auditors should review data conversion
– “Emergency”
changes or deviations from policy must
processes for accuracy.
be documented and subjected to a formal review and
approval process as soon after implementation as
practicable. All such actions should be logged to
provide an audit trail.
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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.
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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.
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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.
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