Chapter 8

Securing Information
Systems

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

STUDENT 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 important tools and technologies for
safeguarding information resources?

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 Essentials of Management Information Systems
Chapter 7 Telecommunications, the Internet, and
Wireless Technology

Student Support Materials

Learning Tracks
1.The Booming Job Market in IT Security
2.The Sarbanes Oxley Act
3.Computer Forensics
4.General and Application Controls for Information Systems
5.Management Challenges of Security and Control
6.Software Vulnerability and Reliability

Video Cases
Case 1: Stuxnet and Cyberwarfare
Case 2: Cyberespionage: The Chinese Threat
Case 3: IBM Zone Trusted Information Channel (ZTIC)
Instructional Video 1: Sony PlayStation Hacked; Data Stolen from 77 Million Users
Instructional Video 2: Zappos Working to Correct Online Security Breach
Instructional Video 3: Meet the Hackers: Anonymous Statement on Hacking SONY

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

MiniDuke Exposes EU Cybersecurity Gaps

• Problem
– Security breach infects government computers in
over 20 European countries
– Leak of geopolitical intelligence
– Fragmented approach to cybersecurity in the EU
leads to disjointed and disparate policies, and
unequal levels of protection.

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

MiniDuke Exposes EU Cybersecurity Gaps

• ENISA urged implementation of a common

cybersecurity strategy but EC3 has not been able
to stipulate a clear definition for cyber security.

• Illustrates: Lack of a centralized and cohesive

approach to cybersecurity

• Demonstrates: Need for updating security

policies continuously and convincing member
nations to participate in a consistent, common
cybersecurity strategy.

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

MiniDuke Exposes EU Cybersecurity Gaps

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

• An unprotected computer connected to Internet

may be disabled within seconds
• 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Why Systems Are Vulnerable

• Hardware problems
• Breakdowns, configuration errors, damage from improper use
or crime
• Software problems
• Programming errors, installation errors, unauthorized changes
• Disasters
• Power failures, flood, fires, and so on
• Use of networks, computers outside of firm’s
control
• Domestic or offshore outsourcing vendors
• Mobile devices
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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

• Internet vulnerabilities
• Network open to anyone

• Size of Internet means abuses can have wide impact

• Use of fixed Internet addresses with permanent

connections to Internet eases identification by hackers

• E-mail attachments, file downloading and sharing

• E-mail used for transmitting trade secrets

• IM messages lack security, can be easily intercepted

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

• Wireless security challenges

• Radio frequency bands easy to scan
• SSIDs (service set identifiers)
• Identify access points.
• Broadcast multiple times.
• War driving
• Eavesdroppers drive by buildings and try to
intercept network traffic
• With access to SSID, has access to network’s
resources
• Rogue access points
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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Wi-Fi Security Challenges

Figure 8.2

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.

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Malicious Software: Viruses, Worms, Trojan Horses,

and Spyware
• Malware
• Viruses
• Rogue software program that attaches itself to other
software programs or data files in order to be executed
• Worms
• Independent computer programs that copy themselves from
one computer to other computers over a network
• Trojan horses
• Software program that appears to be benign but then does
something other than expected.

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Malicious Software: Viruses, Worms, Trojan Horses,

and Spyware
• SQL injection attacks
• Spyware
• Small programs install themselves surreptitiously on
computers to monitor user Web surfing activity and serve
up advertising
• Key loggers
• Record every keystroke on computer to steal serial
numbers, passwords, launch Internet attacks

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Hackers and Computer Crime

• Hackers versus crackers

• Activities include:
• System intrusion
• Theft of goods and services
• System damage
• Cybervandalism — Intentional disruption,
defacement, destruction of Web site or
corporate information system

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Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Hackers and Computer Crime

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

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Hackers and Computer Crime

• Denial-of-service attacks (DoS)

• Flooding server with thousands of false requests to crash the
network.
• Distributed denial-of-service attacks (DDoS)
• Use of numerous computers to launch a DoS
• Botnets
• Networks of “zombie” PCs infiltrated by bot malware

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Hackers and Computer Crime

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

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Hackers and Computer Crime

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

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Hackers and Computer Crime

• Pharming
• Redirects users to a bogus Web page, even when
individual types correct Web page address into his
or her browser
• Click fraud
• Fraudulent clicks on online ads
• Global threats
• Cyberterrorism
• Cyberwarfare

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Internal Threats: Employees

• Security threats often originate inside an

organization.
• Inside knowledge
• Sloppy security procedures
• User lack of knowledge
• Social engineering:
• Tricking employees into revealing their passwords by
pretending to be legitimate members of the company in
need of information

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

Software Vulnerability
• Commercial software contains flaws that create
security vulnerabilities.
• Hidden bugs (program code defects)
• Zero defects cannot be achieved because complete testing
is not possible with large programs
• Flaws can open networks to intruders
• Zero-day Vulnerabilities
• Can’t protect against malware you don’t know about
• Surprise: there’s new malware everyday
• Anti-malware and virus programs always behind
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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Why Are Information Systems Vulnerable?

• Patches: Small pieces of software to repair flaws released by

vendors
• However, amount of software in use, and shear number of
malware programs, can mean exploits are created faster than
patches can be released
• Large number of software applications

• Disparate operating systems

• Poor management of patches

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

What is the 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.
• 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Business Value of Security and Control

Legal and Regulatory Requirements for Electronic

Records Management
• Firms face new legal obligations for the retention and
storage of electronic records as well as for privacy
protection
• HIPAA: medical security and privacy rules and procedures
• Gramm-Leach-Bliley Act: requires financial institutions to
ensure the security and confidentiality of customer data
• Sarbanes-Oxley Act: imposes responsibility on companies
and their management to safeguard the accuracy and integrity
of financial information that is used internally and released
externally

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Business Value of Security and Control

Electronic Evidence and Computer Forensics

• Evidence for white collar crimes often found in
digital form
• Data stored on computer devices, e-mail, instant messages,
e-commerce transactions
• Proper control of data can save time, 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

What are the components of an organizational framework for

security and control?

• Information systems 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Components of an organizational framework for security and control

• Types of general controls

• Software controls

• Hardware controls

• Computer operations controls

• Data security controls

• Implementation controls

• Administrative controls

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Chapter 8 Securing Information Systems

Components of an organizational 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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Chapter 8 Securing Information Systems

Components of an organizational 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

EXPOSURE PROBABILITY LOSS RANGE EXPECTED

ANNUAL LOSS

Power failure 30% $5K - $200K $30,750

Embezzlement 5% $1K - $50K $1,275

User error 98% $200 - $40K $19,698

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Stuxnet and the Changing Face of Cyberwarfare

Interactive Session: Organizations

Stuxnet and the Changing Face of Cyberwarfare
Read the Interactive Session and answer the following questions:

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

• Assess the management, organization, and technology
factors that have created this problem.
• What makes Stuxnet different from other cyberwarfare
attacks? How serious a threat is this technology?
• What solutions have been proposed for this problem? Do
you think they will be effective? Why or why not?
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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Components of an organizational framework for security and control

• Security policy
• Ranks information risks
• Identifies acceptable security goals
• Identifies mechanisms for achieving these goals
• Drives other policies
• Acceptable use policy (AUP)
• Authorization policies
• Provisions for identity management

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Chapter 8 Securing Information Systems

Components of an organizational framework for security and control

• Identity management
• Business process and technologies for
identifying valid users of system
• Creates different levels or roles of system user
and access
• Allows each user access only to those
portions of system that user role

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Components of an organizational framework for security and control

Security Profiles for a Personnel System

Figure 8.3
These two examples
represent two security
profiles or data security
patterns that might be
found in a personnel
system. Depending on the
security profile, a user
would have certain
restrictions on access to
various systems,
locations, or data in an
organization.

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Components of an organizational framework for security and control

Disaster Recovery Planning and Business

Continuity Planning

• Disaster recovery planning: Devises plans for

restoration of disrupted services
• Business continuity planning: Focuses on restoring
business operations after disaster
• Both types of plans needed to identify firm’s most critical
systems
• Business impact analysis to determine impact of an outage
• Management must determine which systems restored first

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Components of an organizational framework for security and control

The Role of Auditing

• MIS audit
• Examines firm’s overall security environment as well as
controls governing individual information systems
• Reviews technologies, procedures, documentation, training,
and personnel
• May even simulate disaster to test response of technology, IS
staff, other employees
• Lists and ranks all control weaknesses and estimates
probability of their occurrence.
• Assesses financial and organizational impact of each threat

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

What are the most important tools and technologies for safeguarding
information resources?

Sample Auditor’s List of Control Weaknesses

Figure 8.4
This chart is a sample
page from a list of
control weaknesses
that an auditor might
find in a loan system in
a local commercial
bank. This form helps
auditors record and
evaluate control
weaknesses and shows
the results of
discussing those
weaknesses with
management, as well as
any corrective actions
taken by management.
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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Identity Management and Authentication

• Authentication
• Password systems
• Tokens
• Smart cards
• Biometric authentication
• Fingerprints, irises, voices

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Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Firewalls, Intrusion Detection Systems, and

Antivirus Software
• Firewall:
• Combination of hardware and software that
prevents unauthorized access to network
• Technologies include:
• Packet filtering
• Stateful inspection
• Network address translation (NAT)
• Application proxy filtering

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

A Corporate Firewall

Figure 8.5
The firewall is
placed between
the firm’s private
network and the
public Internet
or another
distrusted
network to
protect against
unauthorized
traffic.

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Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

• Intrusion detection systems:

• Monitor hot spots on corporate networks to detect
and deter intruders.
• Examine events as they are happening to discover
attacks in progress.
• Antivirus and antispyware software:
• Check computers for presence of malware and can
often eliminate it as well.
• Require continual updating.
• Unified Threat Management (UTM) systems

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Securing Wireless Networks

• WEP security can be improved:
• Activating it
• Assigning unique name to network’s 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Encryption and Public Key Infrastructure

• 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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 Essentials of Management Information Systems
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Most important tools and technologies for safeguarding information resources

Encryption and Public Key Infrastructure

• 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Public Key Encryption

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

Figure 8.6
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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

• Digital certificate:
• Data file used to establish the identity of users and electronic
assets for protection of online transactions
• Uses 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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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Digital Certificates
Figure 8.7

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

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Ensuring System Availability

• Online transaction processing requires 100
percent availability, no downtime.
• Fault-tolerant computer systems
• For continuous availability, e.g., stock markets
• Contain redundant hardware, software, and power supply
components that create an environment that provides
continuous, uninterrupted service
• High-availability computing
• Helps recover quickly from crash
• Minimizes, does not eliminate, downtime

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Ensuring System Availability

• Recovery-oriented computing
• Designing systems that recover quickly with capabilities to
help operators pinpoint and correct faults in multicomponent
systems
• Controlling network traffic
• Deep packet inspection (DPI) (video and music blocking)
• Security outsourcing
• Managed security service providers (MSSPs)

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Security Issues for Cloud Computing

• Cloud computing
• Highly distributed computing, difficult to
track unauthorized activities
• Cloud users should ask for proof of
security and privacy procedures,
including encryption
• Service level agreements (SLAs)

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Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Security Issues for the Mobile Digital Platform

• Mobile platforms
• Mobile device management tools for
authorization and inventory
• Data loss prevention technology
• Mobile security policies: platform, software,
procedures, security products
• Encryption
• BYOD
• Mobile protective software products

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

The Flash Crash: A New Culprit

Interactive Session: Technology

MWEB Business Hacked
Read the Interactive Session and answer the following questions:
• What security and control problems are described in this case?
• What people, organization, and technology factors contribute to
these problems?
• How secure is cloud computing? Explain your answer.
• If you were in charge of your company’s information systems
department, what issues would you want to clarify with
prospective vendors?
• Would you entrust your corporate systems to a cloud computing
provider? Why or why not?

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 Essentials of Management Information Systems
Chapter 8 Securing Information Systems

Most important tools and technologies for safeguarding information resources

Ensuring Software Quality

• Software Metrics: objective assessments of system in form of
quantified measurements, e.g.:
• Number of transactions
• Online response time
• Payroll checks printed per hour
• Known bugs per hundred lines of code
• Early and regular testing
• Walkthrough: review of specification or design document by
small group of qualified people
• Debugging: process by which errors are eliminated

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