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IT Auditing: Using Controls to Protect Information Assets, Second Edition
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a system within each retail store (step 2) We should be able to identify several threats for each process component When combined, they represent all the threats associated with the processing of an information asset
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Quantifying Threats
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After we ve identified our threats, we need to understand their potential impact and the probability that they will occur if not mitigated As we discussed in the Quantitative Risk Analysis section earlier, two factors play into estimating the severity of a threat: Degree of asset loss Likelihood of occurrence We can use the exposure factor (EF) to represent the degree of loss and the annual rate of occurrence (ARO) to represent the likelihood of an occurrence A threat then can be quantified by multiplying EF ARO If we look at our credit card processing example, we may estimate that a hard disk failure would cause the loss of one day s worth of a store s sales and would fail in the store-side systems once every 2 years We would calculate the threat by multiplying 1/365 (000274) 05 The result would be approximately 000137 We then would multiply this by each store s annual sales to quantify the threat
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Phase 3: Assess Vulnerabilities
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We now have identified our information assets and the threats to each asset In this phase, we will assess vulnerabilities In examining threats, the common denominator is the information asset, because each threat is tied to an information asset When assessing vulnerabilities, on the other hand, the common denominator is the information process We will first identify process-component vulnerabilities and then combine them to determine our process vulnerabilities Process vulnerabilities then will be combined to determine business function vulnerabilities Instead of working from the top down (from business function to process component), we will work from the bottom up in assessing vulnerabilities We will use the following steps in analyzing vulnerabilities: 1 Identify existing controls in relation to threats 2 Determine process component control gaps 3 Combine control gaps into processes and then business functions 4 Categorize control gaps by severity 5 Assign risk ratings
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18: Risk Management
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NOTE Prior to World War II, France recognized Germany, its neighbor to the east, as a growing threat Therefore, the French government built a line of walls, tank defenses, and bunkers called the Maginot Line to defend against invasion French military leadership decided to end the wall on the north side at the Ardennes Forest, which was believed to be impassable as a result of its dense nature When the Germans invaded in 1940, they bypassed the Maginot Line fortifications in favor of the dense forest History shows that the French certainly understood the threat but miscalculated their vulnerabilities In the same way, it is critical that you not only understand the threats to your information assets but also that you accurately assess the related vulnerabilities
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Identifying Existing Controls
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The initial step in examining vulnerabilities is to review threats and inventory existing controls that mitigate each threat In our credit card processing example, we identified the threat of a hard disk failure We also may determine that systems back up disk information each night and a RAID level 5 disk array provides hard disk redundancy To get an accurate understanding of an organization s risk, we need to identify all the controls that have been applied Like threats, controls can be technical, physical, or administrative in nature Table 18-2 provides a partial list of each type of control
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PART III
Determining Process Component Control Gaps
Now that we ve identified the existing controls that have been employed, we can begin to see areas where controls are ineffective or simply do not exist In the preceding example, we identified two controls that are mitigating the threat of a hard disk failure:
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