HAPTER 9

1. HAPTER 9 Information Systems Controls for System Reliability Part 2: Confidentiality and Privacy

2. 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? • Explain how the two basic types of encryption systems work.

3. CONFIDENTIALITY • According to the Trust Services framework, reliable systems satisfy five principles: • Security (discussed in Chapter 8) • Confidentiality • Privacy • Processing integrity • Availability SYSTEMS RELIABILITY CONFIDENTIALITY PROCESSING INTEGRITY PRIVACY AVAILABILITY SECURITY

4. Confidentiality Where is the information, who has access to it? Classify value of information The process of obscuring information to make it unreadable without special knowledge, key files, or passwords. Information rights management: control who can read, write, copy , delete, or download information. Most important! Employees need to know what can or can’t be read, written, copied, deleted, or downloaded

5. Identification and Classification • Intellectual Property (IP) • Strategic plans • Trade secrets • Cost information • Legal documents • Process improvements • All need to be secured

6. Encryption • Encryption alone is not sufficient to protect confidentiality. Given enough time, many encryption schemes can be broken. • Access controls are also needed • Strong authentication techniques are necessary.

7. Controlling Access • Information Rights Management (IRM) software • Can limit the actions (read, write, change, delete, copy, etc.) that authorized users can perform when accessing confidential information • Physical access controls • System outputs • Magnetic and optical media • Data Loss Prevention (DLP) software • Voice-over-the-Internet (VoIP) technology • Virtualization and cloud computing

8. Training • Employee use of email and instant messaging (IM) probably represents two of the greatest threats to the confidentiality of sensitive information. • Use of encryption software • Leaving workstations unattended • Code reports to reflect importance • Clean desk policy

9. PRIVACY • 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. SYSTEMS RELIABILITY CONFIDENTIALITY PROCESSING INTEGRITY PRIVACY AVAILABILITY SECURITY

10. Privacy • Same controls as confidentiality • Identification and classification • Encryption • Access control • Training

11. Privacy Concerns • SPAM • Unsolicited e-mail that contains either advertising or offensive content • Controlling the Assault of Non-Solicited Pornography and Marketing Act. CAN-SPAM (2003) • Criminal and civil penalties for spamming

12. Privacy Concerns • Organizations must carefully follow the CAN-SPAM guidelines, which include: • The sender’s identity must be clearly displayed in the message header. • The subject field in the header must clearly identify the message as an advertisement or solicitation. • The body must provide recipients with a working link that can be used to “opt out” of future email. • The body must include the sender’s valid postal address. • Organizations should not: • Send email to randomly generated addresses. • Set up websites designed to harvest email addresses of potential customers.

13. Privacy Concerns • Identity Theft • The unauthorized use of someone’s personal information for the perpetrator’s benefit. • Companies have access to and thus must control customer’s personal information.

14. Privacy Regulatory Acts • A number of regulations, including the Health Insurance Portability and Accountability Act (HIPAA), Health Information Technology for Economic and Clinical Health Act (HITECH), and the Financial Services Modernization Act (aka, Gramm-Leach-Billey Act) require organizations to protect the privacy of customer information.

15. ENCRYPTION • Encrypting sensitive stored data provides one last barrier that must be overcome by an intruder. • Encryption plays an essential role in ensuring and verifying the validity of e-business transactions. • Therefore, accountants, auditors, and systems professionals need to understand encryption.

16. Plaintext ENCRYPTION This is a contract for . . . Key + • Encryption is the process of transforming normal text, called plaintext, into unreadable gibberish, called ciphertext. • Decryption reverses this process. • To encrypt or decrypt, both a key and an algorithm are needed. Encryption Algorithm Key Xb&j &m 2 ep0%fg . . . + Cipher- text Decryption Algorithm This is a contract for . . . Plain- text

17. Encryption Strength • Key length • Number of bits (characters) used to convert text into blocks • 256 is common • Algorithm • Manner in which key and text is combined to create scrambled text • Policies concerning encryption keys • Stored securely with strong access codes

18. ENCRYPTION • Types of Encryption Systems • There are two basic types of encryption systems • Symmetric encryption systems • Asymmetric encryption systems

19. ENCRYPTION • Symmetric Encryption Systems • Use the same key to encrypt and decrypt. • Symmetric encryption advantages: • It is much faster than asymmetric encryption. • Symmetric encryption disadvantages: • Both parties need to know the secret key, so a method is needed to securely exchange the keys, and email is not an appropriate solution. • A different key needs to be created for each party with whom the entity engages in encrypted transactions. • Since both sides of a transaction are using the same key, there is no way to prove which of the two parties created a document.

20. ENCRYPTION • Asymmetric encryption systems • Use two keys: • The public key is publicly available. • The private key is kept secret and known only to the owner of that pair of keys. • Either key can be used to encrypt. • Whichever key is used to encrypt, the other key must be used to decrypt. • The main drawback to asymmetric encryption is speed.

21. ENCRYPTION • Hybrid Solution • Use symmetric for encrypting information • Use asymmetric for encrypting symmetric key for decryption

22. Hashing • Converts information into a “hashed” code of fixed length. • The code can not be converted back to the text. • If any change is made to the information the hash code will change, thus enabling verification of information.

23. Digital Signature • Hash of a document that is encrypted using document creators’ private key • Provides proof: • That document has not been altered • Of the creator of the document

24. Digital Certificate • Electronic document that contains an entity’s public key • Certifies the identity of the owner of that particular public key • Issued by Certificate Authority • Public Key Infrastructure (PKI)

25. Virtual Private Network (VPN) • 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

26. Virtual Private Network (VPN) • Private communication channels, often referred to as tunnels, which are accessible only to those parties possessingthe appropriate encryption and decryption keys.