2. Chapter 11: Computer Crime, Fraud, Ethics, and Privacy
Introduction
Computer Crime, Abuse, and Fraud
Three Examples of Computer Crimes
Preventing Computer Crime and Fraud
Ethical Issues, Privacy, and Identity Theft

3. Computer Crime, Abuse, and Fraud
High level of public interest
Data on incidents is limited
Sources of information
Computer Security Institute (CSI) annual survey
KPMG surveys
Association of Certified Fraud Examiners (ACFE) survey

4. Computer Crime, Abuse, and Fraud
Manipulation of a computer or computer data
Dishonestly obtain money, acquire property, or something of value, or cause a loss
Computer Abuse
Unauthorized use of, or access to, a computer
Against the wishes of the owner

5. Computer Crime Examples

6. Computer Crime, Abuse, and Fraud
Fraudulent Financial Reporting
Intentional falsification of accounting records
Intend to mislead analysts, creditors, investors
Misappropriation of Assets
Misuse of company assets
Committed by employees within an organization

7. Asset Misappropriation Examples

8. Federal Legislation of Computer Crimes
Computer Fraud and Abuse Act of 1986 (CFAA)
Amended in 1994 and 1996
Computer Fraud Definition
An illegal act
Computer technology essential for perpetration, investigation, or prosecution

9. CFAA Fraudulent Acts
Unauthorized theft, use, access, modification, copying, or destruction of software or data
Theft of money by altering computer records or the theft of computer time
Intent to illegally obtain information or tangible property through the use of computers

10. CFAA Fraudulent Acts
Use, or the conspiracy to use, computer resources to commit a felony
Theft, vandalism, destruction of computer hardware
Trafficking in passwords or other login information for accessing a computer
Extortion that uses a computer system as a target

11. Federal Legislation Affecting the Use of Computers

12. Federal Legislation Affecting the Use of Computers

13. State Legislation Every state has a computer crime law
State law provisions
Define computer terms
Define some acts as misdemeanors
Declare other acts as felonies

14. Computer-Crime Statistics
Limited availability of data
Private companies handle abuse internally
Most computer abuse is probably not discovered
Growth of computer crime
Exponential growth in use of computer resources
Continuing lax security
Availability of information about how to perpetrate computer crimes

15. Importance of Computer Crime and Abuse to AISs
Impact on AISs
Favored target due to control of financial resources
Prized target for disgruntled employees
Responsible for designing, selecting, and implementing controls that protect AISs
Reliance on auditors to verify financial statement
Additional Items
Ability to mislead public if information is incomplete or inaccurate
Difficulty in detecting fraudulent activities
Large amount of losses

16. Compromising Valuable Information: The TRW Credit Data Case
Summary
Credit rating company
Altered company credit ratings for a fee
Clients relied on inaccurate information
Analysis
Data diddling – proprietary data
Fair Credit Reporting Act – protection of consumer

17. Wire Fraud and Computer Hacking: Edwin Pena and Robert Moore
Summary
Voice over Internet Protocol (VoIP)
Hacked into other provider’s network
Billed those companies
Analysis
Growth of hacking
Importance of education and prevention
Utilize ethical hackers for instrusion testing

18. Denial of Service: The 2003 Internet Crash
Summary
Slammer worm
Identified weakness in Microsoft SQL Server 2000 software
Analysis
Denial of Service (DOS) attacks
Computer Viruses
Computer Worms and Worm Programs
Boot-sector Viruses and Trojan Horse Programs

19. Protecting Systems Preventing Viruses
Firewalls
Antivirus software
Antivirus control procedures
Organizational Control Procedures
Discourage free exchange of computer disks or external programs
Require strong passwords to limit unauthorized access
Use antivirus filters

20. Common Types of Computer Crime and Abuse

21. Preventing Computer Crime and Fraud
Enlist Top-Management Support
Increase Employee Awareness and Education
Assess Security Policies and Protect Passwords
Strong passwords
Social engineering
Lock-out systems
Dialback systems

22. 10 Simple Steps to Safer PCs

23. 10 Simple Steps to Safer PCs

24. Preventing Computer Crime and Fraud
Implement Controls
Identify Computer Criminals
Nontechnical Backgrounds
Noncriminal Backgrounds
Education, Gender, and Age
Don’t Forget Physical Security
Employ Forensic Accountants

25. Occupations of Computer Abuse Offenders

26. Fraud Losses and Education Level of Perpetrator

27. Recognizing Symptoms of Employee Fraud
Accounting Irregularities
Internal Control Weaknesses
Unreasonable Anomalies
Lifestyle Changes
Behavioral Changes

28. Study Break #4 Most computer criminals: Have nontechnical backgrounds
Have noncriminal backgrounds
Have little college education
Are young and bright
Have probably not been caught, so we don’t know much about them

29. Study Break #4 - Answer Most computer criminals:
Have nontechnical backgrounds
Have noncriminal backgrounds
Have little college education
Are young and bright
Have probably not been caught, so we don’t know much about them

30. Ethical Issues, Privacy, and Identity Theft
Ethics
A set of moral principles or values
Governs organizations and individuals
Ethical behavior
Making choices and judgments that are morally proper
Acting accordingly

31. Ethical Issues, Privacy, and Identity Theft
Ethical Issues and Professional Associations
Codes of Ethics/Professional Conduct
Certification programs and Ethics committees
Meeting the Ethical Challenges
Inform employees of importance of ethics
Ethics training
Lead by example
Utilize reward system

32. Ethical Issues in Computer Usage

33. Ethical Issues, Privacy, and Identity Theft
Company Policies with Respect to Privacy
Who owns the computer and data stored on it?
What purposes the computer may be used?
What uses are authorized or prohibited?
Identity Theft
Dumpster diving
Phishing
Smishing

34. Identity Theft Methods