Transcript Chapter 2: Computer Operations

Chapter 2:
Computer Operations
STRUCTURING THE IT
FUNCTION
 Centralized data processing
[see Figure 2-1]
 Organizational chart [see Figure 2-2]
 Database administrator
 Data processing manager/dept.
 Data control
 Data preparation/conversion
 Computer operations
 Data library
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Systems development & maintenance
 Participants
 End users
 IS professionals
 Auditors
 Other stakeholders
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Objectives:
 Segregate transaction authorization from
transaction processing
 Segregate record keeping from asset custody
 Divide transaction processing steps among
individuals to force collusion to perpetrate
fraud
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Separating systems development from
computer operations
[see Figure 2-2]
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Separating DBA from other functions
 DBA is responsible for several critical tasks:
 Database security
 Creating database schema and
user views
 Assigning database access authority to users
 Monitoring database usage
 Planning for future changes
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT functions
 Alternative 1: segregate systems analysis
from programming [see Figure 2-3]
 Two types of control problems from this approach:
 Inadequate documentation
 Is a chronic problem. Why?
 Not interesting
 Lack of documentation provides job security
 Assistance: Use of CASE tools
 Potential for fraud
 Example: Salami slicing, trap doors
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Alternative 2: segregate systems
development from maintenance
[see Figure 2-2]
 Two types of improvements from this
approach:
1. Better documentation standards
 Necessary for transfer of responsibility
2. Deters fraud
 Possibility of being discovered
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT functions
 Segregate data library from operations
 Physical security of off-line data files
 Implications of modern systems on use of data
library:
 Real-time/online vs. batch processing
 Volume of tape files is insufficient to justify full-time
librarian
 Alternative: rotate on ad hoc basis
 Custody of on site data backups
 Custody of original commercial software and licenses
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Audit objectives
 Risk assessment
 Verify incompatible areas are properly
segregated
 How would an auditor accomplish this objective?
 Verify incompatible areas are properly
segregated
 Verify formal vs. informal relationships exist
between incompatible tasks
 Why does it matter?
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STRUCTURING THE IT
FUNCTION
 Segregation of incompatible IT
functions
 Audit procedures:
 Obtain and review security policy
 Verify policy is communicated
 Review relevant documentation (org. chart, mission
statement, key job descriptions)
 Review systems documentation and maintenance
records (using a sample)
 Verify whether maintenance programmers are also
original design programmers
 Observe segregation policies in practice
 Review operations room access log
 Review user rights and privileges
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STRUCTURING THE IT
FUNCTION
 The distributed model
 Distributed Data Processing (DDP)
 Definition [see figure 2-4]
 Alternative A: centralized
 Alternative B: decentralized / network
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STRUCTURING THE IT
FUNCTION
 The distributed model
 Risks associated with DDP
 Inefficient use of resources
 Mismanagement of resources by end users
 Hardware and software incompatibility
 Redundant tasks
 Destruction of audit trails
 Inadequate segregation of duties
 Hiring qualified professionals
 Increased potential for errors
 Programming errors and system failures
 Lack of standards
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STRUCTURING THE IT
FUNCTION
 The distributed model
 Advantages of DDP
 Cost reduction
 End user data entry vs. data control group
 Application complexity reduced
 Development and maintenance costs reduced
 Improved cost control responsibility
 IT critical to success then managers must
control the technologies
 Improved user satisfaction
 Increased morale and productivity
 Backup flexibility
 Excess capacity for DRP
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STRUCTURING THE IT
FUNCTION
 Controlling the DDP environment
 Need for careful analysis
 Implement a corporate IT function
 Central systems development
 Acquisition, testing, and implementation of
commercial software and hardware
 User services
 Help desk: technical support, FAQs, chat room,
etc.
 Standard-setting body
 Personnel review
 IT staff
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STRUCTURING THE IT
FUNCTION
 Controlling the DDP environment
 Audit objectives:
 Conduct a risk assessment
 Verify the distributed IT units employ entitywide standards of performance that
promotes compatibility among hardware,
operating software, applications, and data
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STRUCTURING THE IT
FUNCTION
 Controlling the DDP environment
 Audit procedures:
 Verify corporate policies and standards are
communicated
 Review current organization chart, mission
statement, key job descriptions to determine
if any incompatible duties exist
 Verify compensating controls are in place
where incompatible duties do exist
 Review systems documentation
 Verify access controls are properly
established
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THE COMPUTER CENTER
 Computer center controls
 Physical location
 Avoid human-made and natural hazards
 Example: Chicago Board of Trade
 Construction
 Ideally: single-story, underground utilities,
windowless, use of filters
 If multi-storied building, use top floor (away from
traffic flows, and potential flooding in a basement)
 Access
 Physical: Locked doors, cameras
 Manual: Access log of visitors
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THE COMPUTER CENTER
 Computer center controls
 Air conditioning
 Especially mainframes
 Amount of heat even from a group of PCs
 Fire suppression
 Automatic: usually sprinklers
 Gas, such as halon, that will smother fire by
removing oxygen can also kill anybody trapped there
 Sprinklers and certain chemicals can destroy the
computers and equipment
 Manual methods
 Power supply
 Need for clean power, at a acceptable level
 Uninterrupted power supply
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THE COMPUTER CENTER
 Computer center controls
 Audit objectives
 Verify physical security controls are reasonable
 Verify insurance coverage is adequate
 Verify operator documentation is adequate in
case of failure
 Audit procedures
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Tests of physical construction
Tests of fire detection
Tests of access control
Tests of backup power supply
Tests for insurance coverage
Tests of operator documentation controls
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PERSONAL COMPUTER
SYSTEMS
 PC operating systems
 PC systems risks & controls
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In general:
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Relatively simple to operate and program
Controlled and operated by end users
Interactive data processing vs. batch
Commercial applications vs. custom
Often used to access data on mainframe or
network
 Allows users to develop their own applications
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Operating Systems:
 Are located on the PC (decentralized)
 O/S family dictates applications (e.g., Windows)
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PERSONAL COMPUTER
SYSTEMS
 Control environment for PCs
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Controls
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Risk of physical loss
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Risk assessment
Inherent weaknesses
Weak access control
Inadequate segregation of duties
Multilevel password control – multifaceted access control
Laptops, etc. can “walk off”
Risk of data loss
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Easy for multiple users to access data
End user can steal, destroy, manipulate
Inadequate backup procedures
 Local backups on appropriate medium
 Dual hard drives on PC
 External/removable hard drive on PC
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PERSONAL COMPUTER
SYSTEMS
 Control environment for PCs
 Risk associated with virus infection
 Policy of obtaining software
 Policy for use of anti-virus software
 Verify no unauthorized software on PCs
 Risk of improper SDLC procedures
 Use of commercial software
 Formal software selection procedures
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PERSONAL COMPUTER
SYSTEMS
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PC systems audit
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Audit objectives
 Verify controls are in place to protect data, programs,
and computers from unauthorized access,
manipulation, destruction, and theft
 Verify that adequate supervision and operating
procedures exist to compensate for lack of
segregation between the duties of users,
programmers, and operators
 Verify that backup procedures are in place to prevent
data and program loss due to system failures, errors
 Verify that systems selection and acquisition
procedures produce applications that are high
quality, and protected from unauthorized changes
 Verify the system is free from viruses and adequately
protected to minimize the risk of becoming infected
with a virus or similar object
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PERSONAL COMPUTER
SYSTEMS
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PC systems audit
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Audit procedures
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Verify that microcomputers and their files are physically controlled
Verify from organizational charts, job descriptions, and observation
that the programmers of applications performing financially
significant functions do not also operate those systems.
Confirm that reports of processed transactions, listings of updated
accounts, and control totals are prepared, distributed, and
reconciled by appropriate management at regular and timely
intervals.
Determine that multilevel password control or multifaceted access
control is used to limit access to data and applications, where
applicable.
Verify that the drives are removed and stored in a secure location
when not in use, where applicable.
Verify that backup procedures are being followed.
Verify that application source code is physically secured (such as
in a locked safe) and that only the compiled version is stored on
the microcomputer.
Review systems selection and acquisition controls
Review virus control techniques.
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OPERATING SYSTEM
 Operating system security
 Definition
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Translates high-level languages
 Compilers and interpreters
Allocates IS/IT resources to users, groups,
applications
Manages the tasks of job scheduling and
multiprogramming
Five imperative control objectives
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Protect itself from users
Protect users from each other
Protect users from themselves
Be protected from itself
Protected from its environment
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OPERATING SYSTEM
 Operating system security
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Logon procedure
Access token [who]
Access control list [what, when, where]
Discretionary access control [delegated
authority]
 Threats to operating system
integrity
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SYSTEM-WIDE CONTROLS
 Controlling access privileges
 Audit objectives
 Audit procedures
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SYSTEM-WIDE CONTROLS
 Password control
 Definition
 Common forms of contra-security
behavior
 Reusable passwords
 One-time passwords
 Password policy
 Audit objectives
 Audit procedures
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FIGURE 2.8 – Password Policy
Proper Dissemination – Promote it, use it during employee training or orientation, and find
ways to continue to raise awareness within the organization.
Proper Length: Use at least 8 characters. The more characters, the more difficult to guess
or crack. Eight characters is an effective length to prevent guessing, if combined with below.
Proper Strength: Use alphabet (letters), numbers (at least 1), and special characters (at
least 1). The more non-alpha, the harder to guess or crack. Make them case sensitive and
mix upper and lower case. A “Strong” password for any critical access or key user.
Password CANNOT contain a real word in the content.
Proper Access Levels or Complexity: Use multiple levels of access requiring multiple
passwords. Use a password matrix of data to grant read-only, read/write, or no access per
data field per user. Use biometrics {such as fingerprints, voice prints}. Use supplemental
access devices, such as smart cards, or beeper passwords in conjunction with remote logins.
Use user-defined procedures.
Proper Timely Changes: At regular intervals, make employees change their passwords.
Proper Protection: Prohibit the sharing of passwords or “post-its” with passwords located
near one’s computer.
Proper Deletion: Require the immediate deletion of accounts for terminated employees, to
prevent an employee from being able to perpetrate adverse activities.
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SYSTEM-WIDE CONTROLS
 E-mail risks
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Spoofing
Spamming
Chain letters
Urban legends
Hoax virus warnings
Flaming
Malicious attachments (e.g., viruses)
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SYSTEM-WIDE CONTROLS
 Malicious objects risk
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Virus
Worm
Logic bomb
Back door / trap door
Trojan horse
Potential control procedures
Audit objective
Audit procedures
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SYSTEM-WIDE CONTROLS
 Controlling electronic audit trails
 Keystroke monitoring (keystroke log)
 Event monitoring (key events log)
 Audit trail objectives
 Detecting unauthorized access
 Reconstructing events
 Personal accountability
 Implementing an audit trail
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SYSTEM-WIDE CONTROLS
 Controlling electronic audit trails
 Audit objective
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Verify adequate audit trails and logs
 Audit procedures
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O/S audit log viewer
ACL extraction of log data (see list)
Sample organizational security group’s
records
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SYSTEM-WIDE CONTROLS
 Disaster recovery planning
 Types of disaster
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SYSTEM-WIDE CONTROLS
 Disaster recovery planning
 Definition
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SYSTEM-WIDE CONTROLS
 Disaster recovery planning
 Critical applications identified and
ranked
 Create a disaster recovery team
with responsibilities
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SYSTEM-WIDE CONTROLS
 Disaster recovery planning
 Site backup
 “Hot site” – Recovery Operations
Center
 “Cold site” – empty shell
 Mutual aid pact
 Internally provided backup
 Other options
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SYSTEM-WIDE CONTROLS
 Disaster recovery planning
 Hardware backup
(if NOT a hot site)
 Software backup: operating system
(if NOT a hot site)
 Software backup: application
software
(based on critical application step)
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SYSTEM-WIDE CONTROLS
 Disaster recovery planning
 Data backup
 Supplies (on site)
 Documentation (on site)
 User manuals
 System and software technical
manuals
 Test!
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Disaster Recovery Plan
1.
Critical Applications – Rank critical applications so an orderly and effective restoration of
computer systems is possible.
2.
Create Disaster Recovery Team – Select team members, write job descriptions, describe
recovery process in terms of who does what.
3.
Site Backup – a backup site facility including appropriate furniture, housing, computers, and
telecommunications. Another valid option is a mutual aid pact where a similar business or
branch of same company swap availability when needed.
4.
Hardware Backup – Some vendors provide computers with their site – known as a hot site
or Recovery Operations Center. Some do not provide hardware – known as a cold site. When
not available, make sure plan accommodates compatible hardware (e.g., ability to lease
computers).
5.
System Software Backup – Some hot sites provide the operating system. If not included in
the site plan, make sure copies are available at the backup site.
6.
Application Software Backup – Make sure copies of critical applications are available at the
backup site
7.
Data Backup – One key strategy in backups is to store copies of data backups away from
the business campus, preferably several miles away or at the backup site. Another key is to
test the restore function of data backups before a crisis.
8.
Supplies – A modicum inventory of supplies should be at the backup site or be able to be
delivered quickly.
9.
Documentation – An adequate set of copies of user and system documentation.
10.
TEST! – The most important element of an effective Disaster Recovery Plan is to test it
IT to
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before a crisis occurs, and
test it&periodically
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a year).
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SYSTEM-WIDE CONTROLS

Disaster recovery planning
 Audit objectives
 Verify management’s DRP is adequate

Audit procedures
 Verify a second-site backup is adequate
 Review the critical application list for completeness
 Verify backups of application software are stored offsite
 Verify that critical data files are backed up and
readily accessible to DRP team
 Verify resources of supplies, documents, and
documentation are backed up and stored off-site
 Verify that members listed on the team roster are
current employees and that they are aware of their
responsibilities
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SYSTEM-WIDE CONTROLS
 Fault tolerance
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Definition
44% of time IS unavailable is due to system failures!
Controls
 Redundant systems or parts
 RAID
 UPS
 Multiprocessors
Audit objective
 To ensure the organization is employing an appropriate
level of fault tolerance
Audit procedures
 Verify proper level of RAID devices
 Review procedures for recovery from system failure
 Verify boot disks are secured
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Chapter 2:
Computer Operations