You are on page 1of 85

Information Security - Lecture 4

Principals of Information Security,


Fourth Edition Chapter 4

Risk Management

Plarent Tirana Ph.D November 11st 2016


Topics
Learning Objectives
Introduction to risk management
Risk Identification
Risk Assessment
Risk Control Strategies
Quantitative versus Qualitative Strategies

Principals of Information Security, Fourth Edition 2


Learning Objectives
Upon completion of this material, you should
be able to:
 Define risk management, risk identification, and
risk control
 Describe how risk is identified and assessed
 Assess risk based on probability of occurrence and
likely impact
 Explain the fundamental aspects of documenting
risk via the process of risk assessment

Principals of Information Security, Fourth Edition 3


Learning Objectives
 Describe the various risk mitigation strategy
options
 Identify the categories that can be used to classify
controls
 Recognize the existing conceptual frameworks for
evaluating risk controls and formulate a cost
benefit analysis
 Describe how to maintain and perpetuate risk
controls

Principals of Information Security, Fourth Edition 4


Topics
Learning Objectives
Introduction to risk management
Risk Identification
Risk Assessment
Risk Control Strategies
Quantitative versus Qualitative Strategies

Principals of Information Security, Fourth Edition 5


Critical Characteristics of Information
The value of information comes from the
characteristics it possesses.
When a characteristic of information changes,
the value of that information either increases,
or, more commonly, decreases.
C.I.A triangle
 Confidentiality
 Integrity
 Availability / Accuracy / Authenticity
Principals of Information Security, Fourth Edition 6
Confidentiality
Information has confidentiality when it is protected from
disclosure or exposure to unauthorized individuals or
systems.
Confidentiality ensures that only those with the rights and
privileges to access information are able to do so.
When unauthorized individuals or systems can view
information, confidentiality is breached.
To protect the confidentiality:
 Information classification
 Secure document storage
 Application of general security policies
 Education of information custodians and end users
Principals of Information Security, Fourth Edition 7
Integrity
Information has integrity when it is whole, complete,
and uncorrupted.
The integrity of information is threatened when the
information is exposed to corruption, damage,
destruction, or other disruption of its authentic state.
Corruption can occur while information is
 Being stored
 Transmitted
File hashing is an effective protection method for
integrity check

Principals of Information Security, Fourth Edition 8


Availability / Accuracy / Authenticity
Availability enables authorized users or computer
systems to access information without interference or
obstruction and to receive it in the required format.
Information has accuracy when it is free from mistakes
or errors and it has the value that the end user expects.
Authenticity of information is the quality or state of
being genuine or original, rather than a reproduction or
fabrication. Information is authentic when it is in the
same state in which it was created, placed, stored, or
transferred.

Principals of Information Security, Fourth Edition 9


Overview of Risk Management
Information security managers and technicians are the
defenders of information.
The many threats discussed in Chapter 2 are constantly
attacking the defenses surrounding information assets.
Defenses are built in layers, by placing safeguard upon
safeguard.
The defenders attempt to prevent, protect, detect, and
recover from a seemingly endless series of attacks.
Moreover, those defenders are legally prohibited from
deploying offensive tactics, so the attackers have no
need to expend resources on defense.
Principals of Information Security, Fourth Edition 10
Overview of Risk Management
Know yourself: identify, examine, and understand
the information and systems currently in place
Know the enemy: identify, examine, and
understand threats facing the organization
Responsibility of each community of interest
within an organization to manage risks that are
encountered
Community of interest: people in an organization
with (possibly) different roles but a shared goal

Principals of Information Security, Fourth Edition 11


The Roles of the Communities of
Interest
Information security, management and users,
and information technology all must work
together
Communities of interest are responsible for:
 Evaluating the risk controls
 Determining which control options are cost
effective for the organization
 Acquiring or installing the needed controls
 Ensuring that the controls remain effective

Principals of Information Security, Fourth Edition 12


The Roles of the Communities of
Interest
Information security, management and users, and
information technology all must work together, but lead by
information security community.
Management review:
 Verify completeness/accuracy of asset inventory
 Review and verify threats as well as controls and mitigation
strategies
 Review cost effectiveness of each control
 Verify effectiveness of controls deployed
Control: A safeguard or counter measure. A security
mechanism, policy, or procedure that can counter system
attack, reduce risks and resolve vulnerability
Principals of Information Security, Fourth Edition 13
Paradigm Shift - What is it?
A paradigm shift or revolutionary science is,
according to Thomas Kuhn, in his influential book
The Structure of Scientific Revolutions (1962), a
change in the basic assumptions, or paradigms,
within the ruling theory of science.
• Kuhn argues that scientific advancement is not
evolutionary, but rather is a "series of peaceful
interludes punctuated by intellectually violent
revolutions", and in those revolutions "one
conceptual world view is replaced by another".
Principals of Information Security, Fourth Edition 14
Paradigm Shift - What is it?
Moving from one thought system to another!
Above From:
http://www.taketheleap.com/define.html
Albert Einstein: “We can't solve problems by
using the same kind of thinking we used
when we created them.”
For information security, it is about how and
what we think of risks around us and how to
control them!
Principals of Information Security, Fourth Edition 15
Components of Risk Management
Risk identification is the examination and
documentation of the security posture of an
organization’s information technology and the
risks it faces.
Risk assessment is the determination of the
extent to which the organization’s information
assets are exposed or at risk.
Risk control is the application of controls to
reduce the risks to an organization’s data and
information systems.
Principals of Information Security, Fourth Edition 16
Components of Risk Management

Principals of Information Security, Fourth Edition 17


Topics
Learning Objectives
Introduction to risk management
Risk Identification
Risk Assessment
Risk Control Strategies
Quantitative versus Qualitative Strategies

Principals of Information Security, Fourth Edition 18


Risk Identification
Risk identification involves identifying, classifying,
and prioritizing an organization’s assets
A threat assessment process identifies and
quantifies the risks facing each asset
Components of risk identification:
 People
 Procedures
 Data
 Software
 Hardware
Principals of Information Security, Fourth Edition 19
What is a risk ?

Principals of Information Security, Fourth Edition 20


Components of Risk Identification

Principals of Information Security, Fourth Edition 21


Plan and Organize the Process
First step in the Risk Identification process is to
follow your project management principles
Begin by organizing a team with representation
across all affected groups
The process must then be planned out
– Periodic deliverables
– Reviews
– Presentations to management
Tasks laid out, assignments made and timetables
discussed
Principals of Information Security, Fourth Edition 22
Categorizing system components

Principals of Information Security, Fourth Edition 23


Asset Identification and Inventory
Iterative process; begins with identification of
assets, including all elements of an
organization’s system (people, procedures,
data and information, software, hardware,
networking)
Assets are then classified and categorized

Principals of Information Security, Fourth Edition 24


People, Procedures, and Data Asset
Identification
Human resources, documentation, and data information
assets are more difficult to identify
SPOF (Single Point of Failure) are important to know
Important asset attributes:
 People: position name/number/ID; supervisor; security
clearance level; special skills
 Procedures: description; intended purpose; what elements it is
tied to; storage location for reference; storage location for
update
 Data: classification; owner/creator/ manager; data structure
size; data structure used; online/offline; location; backup
procedures employed
Principals of Information Security, Fourth Edition 25
Hardware, Software, and Network
Asset Identification
What information attributes to track depends on:
 Needs of organization/risk management efforts
 Preferences/needs of the security and information
technology communities
Asset attributes to be considered are: name; IP
address; MAC address; element type; serial number;
manufacturer name; model/part number; software
version; physical or logical location; controlling entity
Automated tools can identify system elements for
hardware, software, and network components

Principals of Information Security, Fourth Edition 26


Data Classification and Management
Variety of classification schemes used by corporate
and military organizations
Information owners responsible for classifying
their information assets
Information classifications must be reviewed
periodically
Most organizations do not need detailed level of
classification used by military or federal agencies;
however, organizations may need to classify data
to provide protection
Principals of Information Security, Fourth Edition 27
Data Classification and Management cont.d
The corporate information classifications are as follows:
 Confidential: Used for the most sensitive corporate information
that must be tightly controlled, even within the company. Access
to information with this classification is strictly on a need- to-
know basis or as required by the terms of a contract.
Information with this classification may also be referred to as “
sensitive” or “ proprietary.”
 Internal: Used for all internal information that does not meet
the criteria for the confidential category and is to be viewed only
by corporate employees, authorized contractors, and other third
parties.
 External: All information that has been approved by
management for public release.

Principals of Information Security, Fourth Edition 28


Data Classification and Management cont.d
US Military uses a 5 level classification
 Top Secret data: “ Any information or material the
unauthorized disclosure of which reasonably could be expected
to cause exceptionally grave damage to the national security.
Examples of exceptionally grave damage include armed
hostilities against the United States or its allies; disruption of
foreign relations vitally affecting the national security;.”
 Secret data: “ Any information or material the unauthorized
disclosure of which reasonably could be expected to cause
serious damage to the national security. Examples of serious
damage include disruption of foreign relations significantly
affecting the national security; significant impairment of a
program or policy directly related to the national security;.”

Principals of Information Security, Fourth Edition 29


Data Classification and Management cont.d
 Classified: Such material would cause "damage" or
be "prejudicial" to national security if publicly
available.
 Restricted: Such material would cause
"undesirable effects" if publicly available.
 Official: Such material forms the generality of
government business, public service delivery and
commercial activity. OFFICIAL information must be
secured against a threat model that is broadly
similar to that faced by a large private company.

Principals of Information Security, Fourth Edition 30


Data Classification and Management cont.d
Need-to-Know allows access to information by individuals
who need the information to perform their work.
Security clearance structure
 Each data user assigned a single level of authorization indicating
classification level
 Before accessing specific set of data, employee must meet need-
to-know requirement
Management of Classified Data
 Storage, distribution, portability, and destruction of classified
data
 Clean desk policy
 Prevent Dumpster diving

Principals of Information Security, Fourth Edition 31


Classifying and Prioritizing Information Assets
Many organizations have data classification
schemes
 E.g. confidential, internal, public data
Classification of components must be specific
to allow determination of priority levels
Categories must be comprehensive and
mutually exclusive

Principals of Information Security, Fourth Edition 32


Information Asset Valuation
Questions help develop criteria for asset valuation
Which information asset:
 Is most critical to organization’s success?
 Generates the most revenue/profitability?
 Would be most expensive to replace or protect?
 Would be the most embarrassing or cause greatest
liability if revealed?
 Example: DB for customer billing transactions and DB
for buying the cleaning supplies for the company.
What is more important in terms of value of data ?

Principals of Information Security, Fourth Edition 33


Information Asset Valuation (cont’d.)

Principals of Information Security, Fourth Edition 34


Information Asset Valuation (cont’d.)
Information asset prioritization
 Create weighting for each category based on the
answers to questions
 Calculate relative importance of each asset using
weighted factor analysis
 List the assets in order of importance using a
weighted factor analysis worksheet

Principals of Information Security, Fourth Edition 35


Example of a Weighted Factor Analysis Worksheet

Principals of Information Security, Fourth Edition 36


Identifying and Prioritizing Threats
Realistic threats need investigation; unimportant
threats are set aside.
Example of ‘Heartbleed’ bug on Windows or
Microsoft SSL bug on Linux systems. Are they
unimportant threats or no threats ?
Threat assessment:
 Which threats present danger to assets?
 Which threats represent the most danger to information?
 How much would it cost to recover from attack?
 Which threat requires greatest expenditure to prevent?

Principals of Information Security, Fourth Edition 37


Review of Threat Classification

Any given threat may fit more than one category


This is just a “model”, helps to think, and be more comprehensive.
Principals of Information Security, Fourth Edition 38
Vulnerability Identification
Specific avenues threat agents can exploit to attack
an information asset are called vulnerabilities
Examine how each threat could be perpetrated
and list organization’s assets and vulnerabilities
Process works best when people with diverse
backgrounds within organization work iteratively in
a series of brainstorming sessions
At end of risk identification process, list of assets
and their vulnerabilities is achieved

Principals of Information Security, Fourth Edition 39


Top Computing Executives survey
A study conducted in 2003 and repeated in 2009 asked the
question: Based on the categories of threats presented earlier,
over 1000 top computing executives were asked to rate each
threat category on a scale of “not significant” to “very
significant.”
The data was converted to a five-point scale with five
representing “very significant.”
CIOs were also asked to identify the top five threats to their
organizations. These were converted into weights, with five
points for a first place vote and so on to one point for a fifth place
vote.
The two ratings were combined into a weighted rank and
compared to the rankings from 2003, as shown in next table.
Principals of Information Security, Fourth Edition 40
Top Computing Executives survey

Principals of Information Security, Fourth Edition 41


How do you know which threat exists
and the ranking of the threats?
Some key findings:
 Of the approximately half of respondents who experienced at
least one security incident last year, fully 45.6 percent of them
reported they’d been the subjects of at least one targeted
attack.
 When asked what security solutions ranked highest on their
wish-lists, many respondents named tools that would improve
their visibility— better log management, security information
and event management, security data visualization, security
 Respondents generally said that regulatory compliance
efforts have had a positive effect on their organization's
security programs.

Principals of Information Security, Fourth Edition 42


Topics
Learning Objectives
Introduction to risk management
Risk Identification
Risk Assessment
Risk Control Strategies
Quantitative versus Qualitative Strategies

Principals of Information Security, Fourth Edition 43


Risk Assessment
 Risk assessment evaluates the relative risk for each
vulnerability
 Assigns a risk rating or score to each information
asset
 The goal at this point: create a method for evaluating
the relative risk of each listed vulnerability
 A single asset may have more than one vulnerability.

Principals of Information Security, Fourth Edition 44


Likelihood
 The probability that a specific vulnerability will be the
object of a successful attack
 Assign numeric value: number between 0.1 (low) and
1.0 (high), or a number between 1 and 100
 Zero not used since vulnerabilities with zero
likelihood are removed from asset/vulnerability list
 Use selected rating model consistently
 Use external references for values that have been
reviewed/adjusted for your circumstances

Principals of Information Security, Fourth Edition 45


Risk Determination
For the purpose of relative risk assessment:
 Risk EQUALS
 Likelihood of vulnerability occurrence
 TIMES value (or impact)
 MINUS percentage risk already controlled
 PLUS an element of uncertainty

Principals of Information Security, Fourth Edition 46


Risk Determination Example

Principals of Information Security, Fourth Edition 47


Risk Determination Example

Principals of Information Security, Fourth Edition 48


Documenting the Results of Risk
Assessment
Final summary comprised in ranked
vulnerability risk worksheet
Worksheet details asset, asset impact,
vulnerability, vulnerability likelihood, and risk-
rating factor
Ranked vulnerability risk worksheet is initial
working document for next step in risk
management process: assessing and
controlling risk
Principals of Information Security, Fourth Edition 49
Ranked vulnerability risk worksheet

Principals of Information Security, Fourth Edition 50


Topics
Learning Objectives
Introduction to risk management
Risk Identification
Risk Assessment
Risk Control Strategies
Quantitative versus Qualitative Strategies

Principals of Information Security, Fourth Edition 51


Identify Possible Controls
 For each threat and associated vulnerabilities that
have residual risk, create preliminary list of control
ideas
 Residual risk is risk that remains to information asset
even after existing control has been applied
 There are three general categories of controls:
 Policies
 Programs—awareness, education, etc
 Technologies

Principals of Information Security, Fourth Edition 52


Risk Control Strategies
Once ranked vulnerability risk worksheet
complete, must choose one of five strategies
to control each risk:
 Defend
 Transfer
 Mitigate
 Accept
 Terminate

Principals of Information Security, Fourth Edition 53


Defend
 Attempts to prevent exploitation of the vulnerability
 Preferred approach
 Accomplished through countering threats, removing
asset vulnerabilities, limiting asset access, and adding
protective safeguards
 Three common methods of risk avoidance:
 Application of policy
 Training and education
 Applying technology

Principals of Information Security, Fourth Edition 54


Transfer
 Control approach that attempts to shift risk to other
assets, processes, or organizations
 If lacking, organization should hire individuals/firms
that provide security management and
administration expertise
 Organization may then transfer risk associated with
management of complex systems to another
organization experienced in dealing with those risks
 President Harry Truman “If can’t stand the heat, get
out of the kitchen”

Principals of Information Security, Fourth Edition 55


Mitigate
 Attempts to reduce impact of vulnerability
exploitation through planning and preparation
 Approach includes three types of plans
 Incident response plan (IRP): define the actions to take
while incident is in progress
 Disaster recovery plan (DRP): most common mitigation
procedure
 Business continuity plan (BCP): encompasses continuation
of business activities if catastrophic event occurs

Principals of Information Security, Fourth Edition 56


Accept
Doing nothing to protect a vulnerability
and accepting the outcome of its
exploitation
Valid only when the particular function,
service, information, or asset does not
justify cost of protection

Principals of Information Security, Fourth Edition 57


Terminate
 Directs the organization to avoid those business activities
that introduce uncontrollable risks
 May seek an alternate mechanism to meet customer
needs
 Example - In 2007 Sprint announced it was canceling the
accounts of around 1,000 people who called customer
service too much.
 At first blush, it might sound like a pretty jerk thing to do, have bad
service and then punish people who complain
 The terminated customers were scamming Sprint, calling in again and
again, just to get free service credits.

Principals of Information Security, Fourth Edition 58


Selecting a Risk Control Strategy
 Level of threat and value of asset play major role in
selection of strategy

 Rules of thumb on strategy selection can be applied:


 When a vulnerability exists
 When a vulnerability can be exploited
 When attacker’s cost is less than potential gain
 When potential loss is substantial

Principals of Information Security, Fourth Edition 59


Selecting a Risk Control Strategy

Principals of Information Security, Fourth Edition 60


Feasibility Studies
 Before deciding on strategy, all information about
economic/noneconomic consequences of
vulnerability of information asset must be explored
 This is an attempt to answer the question, “What are
the actual and perceived advantages of
implementing a control as opposed to the actual and
perceived disadvantages of implementing the
control?”
 A number of ways exist to determine advantage of a
specific control

Principals of Information Security, Fourth Edition 61


Cost Benefit Analysis (CBA)
 Begun by evaluating worth of assets to be protected
and the loss in value if they are compromised
 The formal process to document this is called cost
benefit analysis or economic feasibility study
 Items that affect cost of a control or safeguard
include: cost of development or acquisition; training
fees; implementation cost; service costs; cost of
maintenance
 Benefit: value an organization realizes using controls
to prevent losses from a vulnerability

Principals of Information Security, Fourth Edition 62


Cost Benefit Analysis (CBA) (cont’d.)
 Asset valuation: process of assigning financial value
or worth to each information asset
 Process result is estimate of potential loss per risk
 Expected loss per risk stated in the following
equation:
 Annualized loss expectancy (ALE) =
 single loss expectancy (SLE) ×
 annualized rate of occurrence (ARO)
 SLE = asset value × exposure factor (EF)

Principals of Information Security, Fourth Edition 63


Cost Benefit Analysis (CBA) (cont’d.)
 CBA determines if alternative being evaluated is
worth cost incurred to control vulnerability
 CBA most easily calculated using ALE from earlier
assessments, before implementation of proposed
control:
 CBA = ALE(prior) – ALE(post) – ACS
 ALE(prior) is annualized loss expectancy of risk before
implementation of control
 ALE(post) is estimated ALE based on control being in place
for a period of time
 ACS is the annualized cost of the safeguard
Principals of Information Security, Fourth Edition 64
Cost Benefit Analysis (CBA) (cont’d.)
 Once value of assets is estimated, potential loss from
exploitation of vulnerability is studied
 Process result is estimate of potential loss per risk
 A single loss expectancy (SLE) is the calculation of the
value associated with the most likely loss from an attack.
It is a calculation based on the value of the asset and the
exposure factor (EF), which is the expected percentage of
loss that would occur from a particular attack, as follows:
 SLE = asset value x exposure factor (EF)
 Asset Value = $100,000 EF = 20%
 SLE = ?

Principals of Information Security, Fourth Edition 65


Cost Benefit Analysis (CBA) (cont’d.)
• Expected loss per risk stated in the following equation:
• Annualized loss expectancy (ALE) equals
• Single loss expectancy (SLE) TIMES
• Annualized rate of occurrence (ARO)
• Annualized Loss Expectancy (ALE) = Single Loss
• Expectancy(SLE) * Annualized Rate of
• Occurrence(ARO)
• Or ALE = SLE * ARO
• ARO = 4 ; ALE = ?
• SLE = asset value x exposure factor (EF)
Principals of Information Security, Fourth Edition 66
Cost Benefit Analysis (CBA) (cont’d.)
 CBA = ALE(prior) – ALE(post) – ACS
 Two different ways of looking at it:
 CBA = Benefit – Cost or (ALE(prior) – ALE(post) ) – ACS
 CBA = Current Cost – Future Cost or
ALE(prior) – ( ALE(post) + ACS )

What to do ?
 CBA > 0; Good
 CBA = 0; Why bother
 CBA < 0; No benefit, forget it

Principals of Information Security, Fourth Edition 67


Evaluation, Assessment, and
Maintenance of Risk Controls
Selection and implementation of control
strategy is not end of process
Strategy and accompanying controls must be
monitored/reevaluated on ongoing basis to
determine effectiveness and to calculate more
accurately the estimated residual risk
Process continues as long as organization
continues to function
Principals of Information Security, Fourth Edition 68
Risk Control Cycle

Principals of Information Security, Fourth Edition 69


Topics
Learning Objectives
Introduction to risk management
Risk Identification
Risk Assessment
Risk Control Strategies
Quantitative versus Qualitative Strategies

Principals of Information Security, Fourth Edition 70


Quantitative versus Qualitative Risk
Control Practices
• Performing the previous steps using actual values or estimates
is known as quantitative assessment
• Possible to complete steps using evaluation process based on
characteristics using non numerical measures; called
qualitative assessment
• Utilizing scales rather than specific estimates relieves
organization from difficulty of determining exact values
• For example; asset costs can be substituted by a scale 1-20;
where 1 is least cost and 20 the most cost; similarly ARO can
be substituted by a scale of 1-20; where 1- rarely occurs and
20 occurs daily (or even hourly).

Principals of Information Security, Fourth Edition 71


Quantitative versus Qualitative Risk
Control Practices
 Quantitative analysis is hard to carry out quickly in a
large organization.
 One should attempt to conduct Qualitative analysis
as a first step to risk management—otherwise, the
entire process may take took long and it may give
wrong impression about usefulness of the Risk
Management process.
 Organizations should remember the adage, “Good
security now is better than perfect security never.”

Principals of Information Security, Fourth Edition 72


Benchmarking* and Best Practices
 An alternative approach to risk management
 Benchmarking: process of seeking out and studying
practices in other organizations that one’s own
organization desires to duplicate
 Learn from others successes and mistakes
 One of two measures typically used to compare
practices:
 Metrics-based measures
 Process-based measures

Principals of Information Security, Fourth Edition 73


Benchmarking* and Best Practices
(cont’d)
 Standard of due care: when adopting levels of
security for a legal defense, organization shows it has
done what any prudent organization would do in
similar circumstances (do compare!)
 Due diligence: demonstration that organization is
diligent in ensuring that implemented standards
continue to provide required level of protection (do
actually help!)
 Failure to support standard of due care or due
diligence can leave organization open to legal liability
Principals of Information Security, Fourth Edition 74
Benchmarking* and Best Practices
(cont’d)
 Best business practices: security efforts that provide
a superior level of information protection
 When considering best practices for adoption in an
organization, consider:
 Does organization resemble identified target with best
practice?
 Are resources at hand similar?
 Is organization in a similar threat environment?

Principals of Information Security, Fourth Edition 75


Benchmarking* and Best Practices
(cont’d)
• “Benchmarking* can yield great benefits in the education
of executives and the realized performance
improvements of operations. In addition, benchmarking
can be used to determine strategic areas of opportunity.
In general, it is the application of what is learned in
benchmarking that delivers the marked and impressive
results so often noted. The determination of benchmarks
allows one to make a direct comparison. Any identified
gaps are improvement areas.”

Above quote from : http://www.best-inclass.


com/bestp/domrep.nsf/pages/716AD479AB1F512C85256DFF006BD0
72!OpenDocument
76
Problems with the Application of
Benchmarking and Best Practices
 Organizations don’t talk to each other (biggest problem)
 Hire consultants.
 Use standards from industry organizations
 No two organizations are identical
 Best practices are a moving target
 Stay more current on a regular basis, not once in a while
 Knowing what was going on in information security industry
in recent years through benchmarking doesn’t necessarily
prepare for what’s next
 Threats evolve

Principals of Information Security, Fourth Edition 77


Benchmarking* and Best Practices
(cont’d)
 Baselining
 Baselining is the analysis of measures against established
standards.
 In information security, baselining is comparison of security
activities and events against an organization’s future
performance
 Useful during baselining to have a guide to the overall
process
 An example is the establishment of the number of attacks per
week the organization is experiencing. In the future, this
baseline can serve as a reference point to determine if the
average number of attacks is increasing or decreasing.
Principals of Information Security, Fourth Edition 78
Other Feasibility Studies (Qualitative Approaches)
 Organizational: examines how well proposed IS
alternatives will contribute to organization’s efficiency,
effectiveness, and overall operation
 Operational: examines user and management
acceptance and support, and the overall requirements
of the organization’s stakeholders
 Technical: examines if organization has or can acquire
the technology necessary to implement and support
the control alternatives
 Political: defines what can/cannot occur based on
consensus and relationships
Principals of Information Security, Fourth Edition 79
Risk Management Discussion Points
 Organization must define level of risk it can live with
 Risk appetite: defines quantity and nature of risk that
organizations are willing to accept as trade-offs
between perfect security and unlimited accessibility
 Residual risk: risk that has not been completely
removed, shifted, or planned for
 The goal of information security is not to bring
residual risk to zero; it is to bring residual risk into
line with an organization’s comfort zone or risk
appetite

Principals of Information Security, Fourth Edition 80


Documenting Results
 At minimum, each information asset-threat pair should have
documented control strategy clearly identifying any remaining
residual risk. Furthermore, each control strategy should articulate
which of the four fundamental risk-reducing approaches will be
used or how they might be combined, and how that should justify
the findings by referencing the feasibility studies.
 Another option: document outcome of control strategy for each
information asset-vulnerability pair as an action plan. This action
plan includes concrete tasks, each with accountability assigned to
an organizational unit or to an individual.
 Risk assessment may be documented in a topic specific report.
These are usually demand reports that are prepared at the direction
of senior management and are focused on a narrow area of
information systems operational risk.

Principals of Information Security, Fourth Edition 81


Recommended Risk Control Practices
Convince budget authorities to spend up to
value of asset to protect from identified threat
Final control choice may be balance of
controls providing greatest value to as many
asset-threat pairs as possible
Organizations looking to implement controls
that don’t involve such complex, inexact, and
dynamic calculations

Principals of Information Security, Fourth Edition 82


Summary
 Risk identification: formal process of examining and
documenting risk in information systems
 Risk control: process of taking carefully reasoned
steps to ensure the confidentiality, integrity, and
availability of components of an information system
 Risk identification
 A risk management strategy enables identification,
classification, and prioritization of organization’s
information assets
 Residual risk: risk remaining to the information asset even
after the existing control is applied

Principals of Information Security, Fourth Edition 83


Summary (cont’d)
 Risk control: five strategies are used to control risks
that result from vulnerabilities:
 Defend
 Transfer
 Mitigate
 Accept
 Terminate

Principals of Information Security, Fourth Edition 84


Summary (cont’d)
 Selecting a risk control strategy
 Cost Benefit Analysis
 Feasibility Study
 Qualitative versus Quantitative Risk Control
 Best Practices and Benchmarks
 Organizational Feasibility, Operational Feasibility, Technical
Feasibility, and Political Feasibility
 Risk Appetite: organizational risk tolerance
 Residual risk: risk remaining after application of risk
controls

Principals of Information Security, Fourth Edition 85

You might also like