Security and Ethical Challenges Chapter 13 Security and Ethical Challenges McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Identify several ethical issues regarding how the use of information technologies in business affects employment, individuality, working conditions, privacy, crime, health, and solutions to societal problems. Identify several types of security management strategies and defenses and explain how they can be used to ensure the security of business applications of information technology.

Learning Objectives Propose several ways that business managers and professionals can help lessen the harmful effects and increase the beneficial effects of the use of information technology.

RWC 1: Ethics, IT and Compliance IT Challenges Technical functionality Business requirements Ethical standards Correct behaviors 2 views of Corporate Ethics Set of legal and minimum standards Set of values integral to doing business Most companies have ethics and compliance programs Few can truly execute an ethical agenda

IT Security, Ethics, and Society Information technology has both beneficial and detrimental effects on society and people Manage work activities to minimize the detrimental effects of information technology Optimize the beneficial effects

Categories of Ethical Business Issues Ethics questions that managers confront as part of their daily business decision making include Equity Rights Honesty Exercise of corporate power

Corporate Social Responsibility Theories Stockholder Theory Managers are agents of the stockholders Only responsible to increase profits without violating the law or fraud Social Contract Theory Responsible to all of society Stakeholder Theory Responsible to anyone affected by company Stockholder Theory Managers are agents of the stockholders Their only ethical responsibility is to increase the profits of the business without violating the law or engaging in fraudulent practices Social Contract Theory Companies have ethical responsibilities to all members of society, who allow corporations to exist Stakeholder Theory Managers have an ethical responsibility to manage a firm for the benefit of all its stakeholders Stakeholders are all individuals and groups that have a stake in, or claim on, a company

Principles of Technology Ethics Proportionality Good must outweigh the harm or risk Informed Consent Those affected should understand and accept risks Justice Benefits and burdens distributed fairly Minimized Risk Avoid all unnecessary risk Proportionality The good achieved by the technology must outweigh the harm or risk; there must be no alternative that achieves the same or comparable benefits with less harm or risk Informed Consent Those affected by the technology should understand and accept the risks Justice The benefits and burdens of the technology should be distributed fairly. Those who benefit should bear their fair share of the risks, and those who do not benefit should not suffer a significant increase in risk Minimized Risk Even if judged acceptable by the other three guidelines, the technology must be implemented so as to avoid all unnecessary risk

AITP Standards of Professional Conduct A responsible professional Acts with integrity Increases personal competence Sets high standards of personal performance Accepts responsibility for his/her work Advances the health, privacy, and general welfare of the public

Security from Cyber Crime Computer crime includes Unauthorized use, access, modification, or destruction of hardware, software, data, or network resources Unauthorized release of information Unauthorized copying of software Denying an end user access to his/her own hardware, software, data, or network resources Using or conspiring to use computer or network resources illegally to obtain information or tangible property

Obsessive use of computers Hacking Obsessive use of computers Unauthorized access and use of networked computer systems Electronic Breaking and Entering Accessing without stealing nor damaging Cracker (black hat or darkside hacker) Maintains knowledge of vulnerabilities for private advantage Common Hacking Tactics Figure 13.7 Denial of Service Hammering a website’s equipment with too many requests for information Clogging the system, slowing performance, or crashing the site Scans Widespread probes of the Internet to determine types of computers, services, and connections Looking for weaknesses Trojan House A program that, unknown to the user, contains instructions that exploit a known vulnerability in some software Back Doors A hidden point of entry to be used in case the original entry point is detected or blocked Malicious Applets Tiny Java programs that misuse your computer’s resources, modify files on the hard disk, send fake email, or steal passwords War Dialing Programs that automatically dial thousands of telephone numbers in search of a way in through a modem connection Logic Bombs An instruction in a computer program that triggers a malicious act Buffer Overflow Crashing or gaining control of a computer by sending too much data to buffer memory Password Crackers Software that can guess passwords Social Engineering Gaining access to computer systems by talking unsuspecting company employees out of valuable information, such as passwords Dumpster Diving Sifting through a company’s garbage to find information to help break into their computers

Most involve theft of money “Inside jobs” Unauthorized activity Cyber Theft Most involve theft of money “Inside jobs” Unauthorized activity Attacks through the Internet Most companies don’t report Most involve theft of money The majority are “inside jobs” that involve unauthorized network entry and alternation of computer databases to cover the tracks of the employees involved Many attacks occur through the Internet Most companies don’t reveal that they have been targets or victims of cybercrime

Cyberterrorism Use IT to attack electronic infrastructure, exchange information or make threats Terror related More political motivation than criminal Examples Attempt to disrupt life support at Antarctic research station Release of untreated sewage in Australia Shut down of government network and banks in Estonia Non-deliberate shut down of systems at nuclear reactor The National Conference of State Legislatures (NCSL) puts a much finer point on the definition of the term: the use of information technology by terrorist groups and individuals to further their agenda. This can include use of information technology to organize and execute attacks against networks, computer systems and telecommunications infrastructures, or for exchanging information or making threats electronically.

Unauthorized Use at Work Time and resource theft Doing private consulting Doing personal finances Playing video games Unauthorized use of the Internet or networks Recreational surfing Racist or offensive e-mail Pornographic sites Sniffers Monitor network traffic or capacity Find evidence of improper use Unauthorized use of computer systems and networks is time and resource theft Doing private consulting Doing personal finances Playing video games Unauthorized use of the Internet or company networks Sniffers Used to monitor network traffic or capacity Find evidence of improper use

Internet Abuses in the Workplace General email abuses Unauthorized usage and access Copyright infringement/plagiarism Newsgroup postings Transmission of confidential data Pornography Hacking Non-work-related download/upload Leisure use of the Internet Use of external ISPs Moonlighting 90 percent of U.S. workers admit to surfing recreational sites during office hours 84 percent say they send personal e-mail from work 23 workers fired because they were distributing racist and sexually offensive jokes 40 workers fired for spending up to eight hours a day on pornography sites on the Web. Several employees even downloaded pornographic videos, which took so much network bandwidth that it choked the company network

Unauthorized copying of computer programs Licensing Software Piracy Unauthorized copying of computer programs Licensing Purchase – payment for fair use Site license – allows a certain number of copies Shareware – allows copies Public Domain – not copyrighted Software industry losses ⅓ to ½ of revenues Millions of copies in educational market 90% pirated software in China Sales negligible Software Piracy Unauthorized copying of computer programs Licensing Purchasing software is really a payment for a license for fair use Site license allows a certain number of copies A third of the software industry’s revenues are lost to piracy Software companies are reluctant to pursue the educational market due to concerns that several copies of purchased software may lead to millions of copies of illegal software, produced “in the name of educating children.”

Theft of Intellectual Property Copyrighted material Music, videos, images, articles, books, software Copyright Infringement is Illegal Easy to trade pirated intellectual property Publishers Offer Inexpensive Online Music Illegal downloading is declining Intellectual Property Copyrighted material Music, videos, images, articles, books, software Copyright Infringement is Illegal Peer-to-peer networking techniques have made it easy to trade pirated intellectual property Publishers Offer Inexpensive Online Music Illegal downloading of music and video is down and continues to drop

Viruses must be inserted into another program Worms can run unaided Viruses and Worms Viruses must be inserted into another program Worms can run unaided Spread annoying or destructive routines Commonly transmitted through Internet and online services Email and file attachments Disks from contaminated computers Shareware Top 5 Virus Families of all time Figure 13.9 Cost of Top 5 Virus Families A virus is a program that cannot work without being inserted into another program A worm can run unaided These programs copy annoying or destructive routines into networked computers Copy routines spread the virus Commonly transmitted through The Internet and online services Email and file attachments Disks from contaminated computers Shareware My Doom, 2004 Spread via email and over Kazaa file-sharing network Installs a back door on infected computers Infected email poses as returned message or one that can’t be opened correctly, urging recipient to click on attachment Opens up TCP ports that stay open even after termination of the worm Upon execution, a copy of Notepad is opened, filled with nonsense characters Netsky, 2004 Tries to spread via peer-to-peer file sharing by copying itself into the shared folder Mass-mailing worm that spreads by emailing itself to all email addresses found on infected computers It renames itself to pose as one of 26 other common files along the way SoBig, 2004 Mass-mailing email worm that arrives as an attachment Examples: Movie_0074.mpg.pif, Document003.pif Scans all .WAB, .WBX, .HTML, .EML, and .TXT files looking for email addresses to which it can send itself Also attempts to download updates for itself Klez, 2002 A mass-mailing email worm that arrives with a randomly named attachment Exploits a known vulnerability in MS Outlook to auto-execute on unpatched clients Tries to disable virus scanners and then copy itself to all local and networked drives with a random file name Deletes all files on the infected machine and any mapped network drives on the 13th of all even-numbered months Sasser, 2004 Exploits a Microsoft vulnerability to spread from computer to computer with no user intervention Spawns multiple threads that scan local subnets for vulnerabilities Nearly 115 million infected computers in 200 countries were infected in 2004 Cost of the top 5 Viruses Up to 11 million computers permanently infected In 2004, total economic damage $166 to $202 billion Average per computer between $277 and $366

Removal often not completely successful Adware and Spyware Adware Useful software allows ads without consent Spyware Type of Adware Can steal private information Add advertising links to Web pages Redirect affiliate payments Change a users home page and search settings Make modem call premium-rate numbers Leave security holes that let Trojans in Degrade system performance Removal often not completely successful Adware Software that purports to serve a useful purpose, and often does Allows advertisers to display pop-up and banner ads without the consent of the computer users Spyware Adware that uses an Internet connection in the background, without the user’s permission or knowledge Captures information about the user and sends it over the Internet

IT capability can create negative affect on privacy Privacy Issues IT capability can create negative affect on privacy Personal information is collected Confidential information stolen or misused Opt-In Explicitly consent to allow data to be compiled Default in Europe Opt-Out Must request data is not collected Default in the U.S. The power of information technology to store and retrieve information can have a negative effect on every individual’s right to privacy Personal information is collected with every visit to a Web site Confidential information stored by credit bureaus, credit card companies, and the government has been stolen or misused

Unauthorized Access of Personal Files Privacy Issues Violation of Privacy Accessing conversations and records Collecting and sharing visits to websites Computer Monitoring Mobile and paging services can track people Computer Matching Market additional business services Unauthorized Access of Personal Files Build profiles of contact and credit information Violation of Privacy Accessing individuals’ private email conversations and computer records Collecting and sharing information about individuals gained from their visits to Internet websites Computer Monitoring Always knowing where a person is Mobile and paging services are becoming more closely associated with people than with places Computer Matching Using customer information gained from many sources to market additional business services Unauthorized Access of Personal Files Collecting telephone numbers, email addresses, credit card numbers, and other information to build customer profiles

Protecting Your Privacy on the Internet Encrypt email Send anonymous postings Ask your ISP not to sell your information Don’t reveal personal data and interests Encrypt email Send newsgroup postings through anonymous remailers Ask your ISP not to sell your name and information to mailing list providers and other marketers Don’t reveal personal data and interests on online service and website user profiles

Electronic Communications Privacy Act and Computer Fraud and Abuse Act Privacy Laws Electronic Communications Privacy Act and Computer Fraud and Abuse Act Prohibit intercepting data communications messages, stealing or destroying data, or trespassing in federal-related computer systems U.S. Computer Matching and Privacy Act Regulates the matching of data held in federal agency files to verify eligibility for federal programs

Health Insurance Portability and Accountability Act (HIPAA) Privacy Laws Sarbanes-Oxley Positive – strengthens accounting controls Negative – overly complex and regulatory Health Insurance Portability and Accountability Act (HIPAA) Safeguards for health-related information Gramm-Leach-Bliley USA Patriot Act California Security Breach Law Securities and Exchange Commission Rule 17a-4

Computer Libel and Censorship The opposite side of the privacy debate… Freedom of information, speech, and press Biggest battlegrounds Bulletin boards Email boxes Online files of Internet and public networks Weapons used in this battle Spamming Flame mail Libel laws Censorship Spamming Indiscriminate sending of unsolicited email messages to many Internet users Flaming Sending extremely critical, derogatory, and often vulgar email messages or newsgroup posting to other users on the Internet or online services Especially prevalent on special-interest newsgroups

Regulate activities electronic communications Cyberlaw Regulate activities electronic communications Wide variety of legal and political issues Intellectual property, privacy, freedom of expression, and jurisdiction Body of law emerged 1996 Controversy Some feel the Internet should not be regulated Encryption and cryptography make regulation difficult Websites work around censorship Applicability of legal principles Better laws to come Laws intended to regulate activities over the Internet or via electronic communication devices Encompasses a wide variety of legal and political issues Includes intellectual property, privacy, freedom of expression, and jurisdiction The intersection of technology and the law is controversial Some feel the Internet should not be regulated Encryption and cryptography make traditional form of regulation difficult The Internet treats censorship as damage and simply routes around it Cyberlaw only began to emerge in 1996 Debate continues regarding the applicability of legal principles derived from issues that had nothing to do with cyberspace

Other Challenges Employment Computer Monitoring Working Conditions Job opportunities changing Computer Monitoring Effective but controversial Working Conditions Eliminated monotonous or obnoxious tasks Eliminated some skilled jobs Individuality Dehumanizes and depersonalizes Employment IT creates new jobs and increases productivity It can also cause significant reductions in job opportunities, as well as requiring new job skills Computer Monitoring Using computers to monitor the productivity and behavior of employees as they work Criticized as unethical because it monitors individuals, not just work, and is done constantly Criticized as invasion of privacy because many employees do not know they are being monitored Working Conditions IT has eliminated monotonous or obnoxious tasks However, some skilled craftsperson jobs have been replaced by jobs requiring routine, repetitive tasks or standby roles Individuality Dehumanizes and depersonalizes activities because computers eliminate human relationships Inflexible systems

Cumulative Trauma Disorders (CTDs) Health Issues Cumulative Trauma Disorders (CTDs) Disorders caused by fast-paced repetitive keystroke jobs Carpal Tunnel Syndrome Painful, crippling ailment of the hand and wrist Typically requires surgery to cure Ergonomics Designing healthy work environments Cumulative Trauma Disorders (CTDs) Disorders suffered by people who sit at a PC or terminal and do fast-paced repetitive keystroke jobs Carpal Tunnel Syndrome Painful, crippling ailment of the hand and wrist Typically requires surgery to cure Ergonomics Designing healthy work environments Safe, comfortable, and pleasant for people to work in Increases employee morale and productivity Also called human factors engineering

Ergonomics Factors 13-29

Use IT to solve human and social problems Societal Solutions Use IT to solve human and social problems Medical diagnosis Computer-assisted instruction (CAI) Computer based training (CBT) Governmental program planning Environmental quality control Law enforcement Job placement Detrimental effects Actions without ethical responsibility

Security Management of IT Security is number 1 problem with the Internet Internet was developed for inter-operability, not impenetrability Users responsible for security, quality, and performance Resources must be protected Goal of security management Accuracy, integrity, and safety of all information system processes and resources Security is number 1 problem with the Internet Internet was developed for inter-operability, not impenetrability Business managers and professionals alike are responsible for the security, quality, and performance of business information systems Hardware, software, networks, and data resources must be protected by a variety of security measures Goal of security management Accuracy, integrity, and safety of all information system processes and resources

RWC 2: End-Point Security Security a complex, moving target Delicate balance between access and security Two approaches Secure devices Secure data wherever it lives Encryption HIPAA regulations Classify data, set policies Smartphones ongoing challenges Balance personal and business use BlackBerries have management infrastructure Phones not secured yet

Public/Private Key Encryption Data is transmitted in scrambled form It is unscrambled by computer systems for authorized users only The most widely used method uses a pair of public and private keys unique to each individual

Internet and Intranet Firewalls A gatekeeper system that protects a company’s intranets and other computer networks from intrusion Provides a filter and safe transfer point for access to/from the Internet and other networks Important for individuals who connect to the Internet with DSL or cable modems Can deter hacking, but cannot prevent it

Denial of Service Attacks Depend on three layers of networked computer systems The victim’s website The victim’s Internet service provider Zombie or slave computers commandeered by cybercriminals Defense At Zombie Machines Set and enforce security policies Scan for vulnerabilities At the ISP Monitor and block traffic spikes At the Victim’s Website Create backup servers and network connections Denial of service attacks depend on three layers of networked computer systems The victim’s website The victim’s Internet service provider Zombie or slave computers that have been commandeered by the cybercriminals Defense At Zombie Machines Set and enforce security policies Scan for vulnerabilities At the ISP Monitor and block traffic spikes At the Victim’s Website Create backup servers and network connections

Internetworked Security Defenses Email Monitoring Virus Defenses Security Codes Backup Files Security Monitors Biometrics Computer Failure Controls Disaster recovery plan Email Monitoring Use of content monitoring software that scans for troublesome words that might compromise corporate security Virus Defenses Centralize the updating and distribution of antivirus software Use a security suite that integrates virus protection with firewalls, Web security, and content blocking features Security Codes Multilevel password system Encrypted passwords Smart cards with microprocessors Backup Files Duplicate files of data or programs Security Monitors Monitor the use of computers and networks Protects them from unauthorized use, fraud, and destruction Biometrics Computer devices measure physical traits that make each individual unique Voice recognition, fingerprints, retina scan Computer Failure Controls Prevents computer failures or minimizes its effects Preventive maintenance Arrange backups with a disaster recovery organization In the event of a system failure, fault-tolerant systems have redundant processors, peripherals, and software that provide Fail-over capability: shifts to back up components Fail-save capability: the system continues to operate at the same level Fail-soft capability: the system continues to operate at a reduced but acceptable level A disaster recovery plan contains formalized procedures to follow in the event of a disaster Which employees will participate What their duties will be What hardware, software, and facilities will be used Priority of applications that will be processed Use of alternative facilities Offsite storage of databases

Information System Controls Methods and devices to ensure accuracy, validity, and propriety IT Security Audits Performed by internal or external auditors Review and evaluation of security measures and management policies Goal: Ensure proper and adequate measures and policies are in place Methods and devices that attempt to ensure the accuracy, validity, and propriety of information system activities IT Security Audits Performed by internal or external auditors Review and evaluation of security measures and management policies Goal is to ensure that that proper and adequate measures and policies are in place

Protecting Yourself from Cybercrime Information System Controls Methods and devices that attempt to ensure the accuracy, validity, and propriety of information system activities IT Security Audits Performed by internal or external auditors Review and evaluation of security measures and management policies Goal is to ensure that that proper and adequate measures and policies are in place

RWC 3: Challenges of Working in IT IT presents ethical challenges and dilemmas. To hold workers accountable Must set ethical policies and guidelines Make sure that employees know and understand them The pervasive use of IT in organizations and society present individuals with new ethical challenges and dilemmas. If companies don’t set ethical policies and guidelines, or don’t make sure that employees know what they are and understand them, companies cannot hold workers accountable for their unethical behavior.

RWC 4: Worry About What Goes Out Leakage of sensitive customer data or proprietary information is a new priority Focus on keeping sensitive information Deploy outbound content management tools e-mail messages, Alternative communication mechanisms Including instant messaging Blogs FTP transfers Web mail Message boards For companies like Raymond James, leakage of sensitive customer data or proprietary information is a new priority. Companies are starting to focus on keeping sensitive information within their boundaries. Companies are deploying Outbound content management tools to monitor outgoing information. Companies not only have to monitor e-mail messages, but also the explosion of alternative communication mechanisms that employees are using, including instant messaging, blogs, FTP transfers, Web mail, and message boards.