Aksana Chornenkaya, Sherin Hassan, & Meagan Moore

  Explain how cyber hacking and economic espionage has evolved over the past century  Examples of hacker groups  Examples of victims of hacking and economic espionage  Acts and Regulations  Prevention Goals of Presentation

  Importance to accounting students and business professionals.  Huge threat to companies, domestic and global.  Growth of technology and reliance on information-based systems. Importance

What is a Hacker? “A person who finds weaknesses in a computer system and exploits it.” “Someone involved in the exploration of technology.”

Hacker Groups Warelords Midwest Pirates Guild 414’s Legion of Doom Many more…….

  Until it was passed, breaking into computer systems was not an illegal or criminal act.  Passed by Congress in 1986  Hacking IS a CRIME!!!! Computer Fraud & Abuse Act

  Operation Sundevil  Secret Services began raiding and arresting hackers  Involved in credit card theft, telephone and wire fraud Operation Sundevil

  DOS attacks  Viruses  Malware - Worms Evolution of Hacking

  Black Hat Hackers – Malicious  White Hat Hackers – Ethical hackers  Grey Hat Hackers Types of Hackers

  Misappropriation of assets  Inventory theft  Insider trading  Credit card fraud  False invoices  Revenue misstatement  Expense account abuse Effects of Hacking on a Co.

  Accountants must be aware of the threats  Internal auditors must develop processes and controls to prevent hacks  Must work with external auditors to identify security controls  Advances in technology increased opportunities for fraud Importance for Accountants

  Fierce competitive pressures  Improvements in eavesdropping technology  Weakest link: Employees Motivation for Economic Espionage

 Most Publicized Cases  Toshiba vs. Lexar  Davis vs. Gillette  Reuters vs. Bloomberg

  Passed in 1996  Failed to curtail the problem  Companies were reluctant to seek prosecution Economic Espionage Act

  SOX Section 404  Proactive and reactive approach  Strong internal auditing department  Strong IT controls  Physical access controls  Employee training Ways to Reduce Hacking and EE

 Companies that implement strong IT controls, physical access controls, nondisclosure agreements and background checks make it harder for hackers or employees to breach systems and acquire proprietary information. In Conclusion

 QUESTIONS?