Chapter 8

Securing Information Systems

Ms.S.M.Murshitha
Senior Lecturer in MIT
Department of Management and Information
Technology
Faculty of Management & Commerce
South Eastern University of Sri Lanka
 Management Information Systems
CHAPTER 8: SECURING INFORMATION SYSTEMS

Learning Objectives

• Why are information systems vulnerable to

destruction, error, and abuse?
• What is the business value of security and control?
• What are the components of an organizational
framework for security and control?
• What are the most important tools and
technologies for safeguarding information
resources?

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You’re on Facebook? Watch Out!

• Facebook – world’s largest social network

• Problem – Identity theft and malicious software
– Examples:
• 2009 18-month hacker scam for passwords, resulted in Trojan
horse download that stole financial data
• Dec 2008 Koobface worm targeting Windows users of Facebook,
Twitter, and other social networking Web sites in order to gather
sensitive information
• May 2010 Spam campaigned aimed at stealing logins
• Illustrates: Types of security attacks facing consumers
• Demonstrates: Ubiquity of hacking, malicious software
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System Vulnerability and Abuse

Businesses need to make top priority to;

• Security:
– Policies, procedures and technical measures used to
prevent unauthorized access, alteration, theft, or
physical damage to information systems
• Controls:
– Methods, policies, and organizational procedures
that ensure safety of organization’s assets; accuracy
and reliability of its accounting records; and
operational adherence to management standards

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System Vulnerability and Abuse

• Why systems are vulnerable (compare with manual)

– Accessibility of networks (ISs in different locations are interconnected)
– Hardware problems (breakdowns, configuration errors,
damage from improper use or crime)
– Software problems (programming errors, installation
errors, unauthorized changes)
– Power failures, floods, fires, or other natural disasters can
also disrupt computer systems.
– Use of networks/computers outside of firm’s control
(domestic of offshore partnership – valuable data could fall in wrong hands)

– Loss and theft of portable devices

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System Vulnerability and Abuse

CONTEMPORARY SECURITY CHALLENGES AND VULNERABILITIES

FIGURE 8-1 The architecture of a Web-based application typically includes a Web client, a server, and corporate
information systems linked to databases. Each of these components presents security challenges and
vulnerabilities. Floods, fires, power failures, and other electrical problems can cause disruptions at any
point in the network.

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CHAPTER 8: SECURING INFORMATION SYSTEMS

System Vulnerability and Abuse

• Internet vulnerabilities
– Network open to anyone
– Size of Internet means abuses can have wide impact
– Constant connection to Internet by cable or DSL modems
creates fixed targets for hackers because they use fixed
Internet addresses where they can be easily identified.
(Dial up service – temporary address)
– Unencrypted VOIP
– E-mail, P2P, IM
• Interception
• Attachments with malicious software
• Transmitting trade secrets

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System Vulnerability and Abuse

• Wireless security challenges

– Radio frequency bands easy to scan (Bluetooth and wi-fi)
– SSIDs (service set identifiers)
• Identify access points
• Broadcast multiple times
• War driving - Eavesdroppers drive by buildings and try to detect SSID and
gain access to network and resources (Wireless networks in many locations do
not have protection against war driving)
– WEP (Wired Equivalent Privacy)- initial security policy for Wi-fi
• Security standard for 802.11; use is optional
• Uses shared password for both users and access point (40 bit
encrypted password)
• Users often fail to implement WEP or stronger systems (WPA2)

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System Vulnerability and Abuse

WI-FI SECURITY
CHALLENGES

Many Wi-Fi
networks can be
penetrated easily by
intruders using
sniffer programs to
obtain an address to
access the
resources of a
network without
authorization.

FIGURE 8-2
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System Vulnerability and Abuse

• Malware (malicious software) includes threats such as

– Viruses
• Rogue software program that attaches itself to other
software programs or data files in order to be executed
–spread machine to machine when human take action.
– Worms
• Independent computer programs that copy themselves from
one computer to other computers over a network. Spread
much more rapidly than computer viruses.
– Trojan horses
• Software program that appears to be caring but then does
something other than expected.
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System Vulnerability and Abuse

• Malware (cont.)
– SQL injection attacks
• Hackers submit data to Web forms that exploits site’s
unprotected software and sends rogue SQL query to
database in poorly coded web application software.
(when ordering something online)
– Spyware
• Small programs install themselves surreptitiously or
secretly on computers to monitor user Web surfing
activity and serve up advertising
– Key loggers
• Record every keystroke on computer to steal serial
numbers, passwords, launch Internet attacks
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System Vulnerability and Abuse

• Hackers and computer crime

– Hackers (an individual who intends to gain unauthorized access to a
computer system ) vs. crackers

– Activities include
• System intrusion / interruption
• System damage
• Cybervandalism
– Intentional interruption, defacement, destruction
of Web site or corporate information system

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System Vulnerability and Abuse

• Spoofing
– Misrepresenting oneself by using fake e-mail addresses
or masquerading as someone else (emkei.cz)
– Redirecting Web link to address different from intended
one, with site masquerading as intended destination
• Sniffer
– Eavesdropping program (Cain and Abel) that monitors
information traveling over network
– Enables hackers to steal proprietary information such as
e-mail, company files, etc.

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System Vulnerability and Abuse

• Denial-of-service attacks (DoS)

– Flooding server with thousands of false requests to
crash the network. Thus can’t serve legitimate
requests.
• Distributed denial-of-service attacks (DDoS)
– Use of numerous computers to launch a DoS (to
make inaccessible)
– Botnets
• Networks of “zombie” PCs penetrated by bot malware
• Worldwide, 6 - 24 million computers serve as zombie
PCs in thousands of botnets
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System Vulnerability and Abuse

• Computer crime
– Defined as “any violations of criminal law that
involve a knowledge of computer technology for
their perpetration, investigation, or prosecution”
– Computer may be target of crime, e.g.:
• Breaching confidentiality of protected computerized
data
• Accessing a computer system without authority
– Computer may be instrument of crime, e.g.:
• Theft of trade secrets
• Using e-mail for threats or harassment

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EXAMPLES OF COMPUTER CRIME

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System Vulnerability and Abuse

• Identity theft
– Theft of personal Information (social security id,
driver’s license or credit card numbers) to
impersonate someone else
• Phishing
– Setting up fake Web sites or sending e-mail
messages that look like legitimate businesses to ask
users for confidential personal data.
• Evil twins (wireless version of the phishing scam)
– Wireless networks that pretend to offer trustworthy
Wi-Fi connections to the Internet
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System Vulnerability and Abuse

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

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System Vulnerability and Abuse

• Internal threats: employees

– Security threats often originate inside an
organization
– Inside knowledge
– Sloppy security procedures
• User lack of knowledge
– Social engineering:
• Tricking or cheeting employees into revealing their
passwords by pretending to be legitimate members of
the company in need of information

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System Vulnerability and Abuse

• Software vulnerability
– Commercial software contains flaws that create security
vulnerabilities
• Hidden bugs (program code defects –open door for hackers)
– Zero defects cannot be achieved because complete testing is not
possible with large programs
• Flaws can open networks to intruders
– Patches
• Vendors release small pieces of software to repair flaws
• However exploits often created faster than patches be
released and implemented

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INTERACTIVE SESSION
WHEN ANTIVIRUS SOFTWARE CRIPPLES YOUR COMPUTERS

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Business Value of Security and Control

• Failed computer systems can lead to significant or

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

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Business Value of Security and Control

• Electronic evidence
– Evidence for white collar crimes often in digital form
• Data on computers, e-mail, instant messages, e-
commerce transactions
– Proper control of data can save time and money
when responding to legal discovery request
• Computer forensics:
– Scientific collection, examination, authentication,
preservation, and analysis of data from computer
storage media for use as evidence in court of law
– Includes recovery of ambient and hidden data
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Establishing a Framework for Security and Control

• Information systems controls are both manual and

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

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Establishing a Framework for Security and Control

• Types of general controls

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Establishing a Framework for Security and Control

• Application controls
– Specific controls unique to each computerized
application, such as payroll or order processing
– Include both automated and manual procedures
– Ensure that only authorized data are completely and
accurately processed by that application
– Include:
• Input controls
• Processing controls
• Output controls

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Establishing a Framework for Security and Control

• Risk assessment: Determines level of risk to firm if

specific activity or process is not properly controlled
• Types of threat
• Probability of occurrence during year
• Potential losses, value of threat
• Expected annual loss
EXPECTED
EXPOSURE PROBABILITY LOSS RANGE (AVG) ANNUAL LOSS
Power failure 30% $5K - $200K ($102,500) $30,750

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

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

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Establishing a Framework for Security and Control

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

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Establishing a Framework for Security and Control

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

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System Vulnerability and Abuse

SECURITY PROFILES
FOR A PERSONNEL
SYSTEM
These two examples represent
two security profiles or data
security patterns that might
be found in a personnel
system. Depending on the
security profile, a user would
have certain restrictions on
access to various systems,
locations, or data in an
organization.
FIGURE 8-3

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Technologies and Tools for Protecting Information Resources

• Identity management software

– Automates keeping track of all
users and privileges
– Authenticates users, protecting
identities, controlling access
• Authentication
– Password systems
– Tokens
– Smart cards
– Biometric authentication

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Technologies and Tools for Protecting Information Resources

• Firewall:
– Combination of hardware and software that
prevents unauthorized users from accessing
private networks
– Technologies include:
• Static packet filtering
• Network Address Translation (NAT)
• Application proxy filtering

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Technologies and Tools for Protecting Information Resources

A CORPORATE
FIREWALL
The firewall is
placed between the
firm’s private
network and the
public Internet or
another distrusted
network to protect
against unauthorized
traffic.

FIGURE 8-5

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Technologies and Tools for Protecting Information Resources

• Intrusion detection systems: (Video)

– Monitor hot spots on corporate networks to detect
and deter intruders
– Examines events as they are happening to discover
attacks in progress
• Antivirus and antispyware software:
– Checks computers for presence of malware and can
often eliminate it as well
– Require continual updating
• Unified threat management (UTM) systems (Video)

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CHAPTER 8: SECURING INFORMATION SYSTEMS

Technologies and Tools for Protecting Information Resources

• Securing wireless networks

– WEP security can provide some security by
• Assigning unique name to network’s SSID and
not broadcasting SSID
• Using it with VPN technology
– Wi-Fi Alliance finalized WPA2 specification,
replacing WEP with stronger standards
• Continually changing keys
• Encrypted authentication system with central
server
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Technologies and Tools for Protecting Information Resources

• Encryption:
– Transforming text or data into cipher text
that cannot be read by unintended
recipients
– Two methods for encryption on networks
• Secure Sockets Layer (SSL) and successor
Transport Layer Security (TLS)
• Secure Hypertext Transfer Protocol (S-
HTTP)
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CHAPTER 8: SECURING INFORMATION SYSTEMS

Technologies and Tools for Protecting Information Resources

• Two methods of encryption

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

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Technologies and Tools for Protecting Information Resources

PUBLIC KEY ENCRYPTION

FIGURE 8-6 A public key encryption system can be viewed as a series of public and private keys that lock data when
they are transmitted and unlock the data when they are received. The sender locates the recipient’s public
key in a directory and uses it to encrypt a message. The message is sent in encrypted form over the
Internet or a private network. When the encrypted message arrives, the recipient uses his or her private
key to decrypt the data and read the message.

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Technologies and Tools for Protecting Information Resources

• Digital certificate:
– Data file used to establish the identity of users and
electronic assets for protection of online transactions
– Uses a trusted third party, certification authority (CA), to
validate a user’s identity
– CA verifies user’s identity, stores information in CA server,
which generates encrypted digital certificate containing
owner ID information and copy of owner’s public key
• Public key infrastructure (PKI)
– Use of public key cryptography working with certificate
authority
– Widely used in e-commerce
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