Chapter 8 Flashcards
Risk
Risk is the likelihood that a threat will exploit a vulnerability.
vulnerability
A vulnerability is a weakness in a system, application, or process,
threat
a threat is a potential danger that might take advantage of a vulnerability.
1. Malicious human threats.
2. Accidental human threats.
3. Environmental threats.
Evaluating Risk
- First, we look at the impact of the risk. This is the magnitude of harm that can be caused if a threat exploits a vulnerability.
- Second, we look at the likelihood or probability of that risk occurring. This tells us how often we expect a risk to occur, if at all.
threat assessment
A threat assessment helps an organization identify and categorize threats. It attempts to predict the threats against an organization’s assets, along with the likelihood the threat will occur. Threat assessments also attempt to identify the potential impact from these threats. Once the organization identifies and prioritizes threats, it identifies security controls to protect against the most serious threats.
Risk Identification
This process looks at information arriving from many different sources and tries to list all of the possible risks that might affect the organization.
Risk Types
- Internal. Internal risks are any risks from within an organization. This includes employees and all the hardware and software used within the organization. Internal risks are generally predictable and can be mitigated with standard security controls.
- External. External risks are from outside the organization. This includes any threats from external attackers. It also includes any natural threats, such as hurricanes, earthquakes, and tornadoes. While some external risks are predictable, many are not. Attackers are constantly modifying attack methods and trying to circumvent existing security controls.
- Intellectual property theft. Intellectual property (IP) includes things like copyrights, patents, trademarks, and trade secrets. Intellectual property is valuable to an organization, and IP theft represents a significant risk.
- Software compliance/licensing.
Software compliance/licensing. Organizations typically put in a lot of time and effort when developing software. They make their money back by selling the licenses to use the software. However, if individuals or organizations use the software without buying a license, the development company loses money. Similarly, an organization can lose money if it purchases licenses, but doesn’t protect them. Imagine your organization purchased 10 licenses for a software application, but several people used 5 of the licenses without authorization. Later, your supervisor gives you one of the licenses, but the application gives an error saying the license has already been used when you try to use it. In this scenario, the organization loses the cost of five licenses.
5 Legacy systems and legacy platforms. The primary risk related to legacy systems and platforms is that the vendor doesn’t support them. If vulnerabilities become known, the vendor doesn’t release patches, and anyone using the legacy system or software is at risk.
Vulnerabilities
A vulnerability is a flaw or weakness in software, hardware, or a process that a threat could exploit, resulting in a security breach. Examples of vulnerabilities include:
- Default configurations. Hardening a system includes changing systems from their default hardware and software configurations, including changing default usernames and passwords. If systems aren’t hardened, they are more susceptible to attacks.
2.Lack of malware protection or updated definitions.
- Improper or weak patch management. If systems aren’t kept up to date with patches, hotfixes, and service packs, they are vulnerable to bugs and flaws in the software, OS, or firmware. Attackers can exploit operating systems, applications, and firmware that have known bugs but aren’t patched.
- Lack of firewalls. If host-based and network firewalls aren’t enabled or configured properly, systems are more vulnerable to network and Internet-based attacks. Chapter 3, “Exploring Network Technologies and Tools,” covers firewalls in more depth.
- Lack of organizational policies. If job rotation, mandatory vacations, and least privilege policies aren’t implemented, an organization may be more susceptible to fraud and collusion from employees.
Risk Management
Risk management is the practice of identifying, analyzing, monitoring, and limiting risks to a manageable level. It doesn’t eliminate risks but instead identifies methods to limit or mitigate them. There are several basic terms that you should understand related to risk management:
- Risk awareness is the acknowledgment that risks exist and must be addressed to mitigate them. Senior personnel need to acknowledge that risks exist. Before they do, they won’t dedicate any resources to manage them.
- Inherent risk refers to the risk that exists before controls are in place to manage the risk.
- Residual risk is the amount of risk that remains after managing or mitigating risk to an acceptable level. Senior management is ultimately responsible for residual risk, and they are responsible for choosing a level of acceptable risk based on the organization’s goals. They decide what resources (such as money, hardware, and time) to dedicate to manage the risk.
- Control risk refers to the risk that exists if in-place controls do not adequately manage risks. Imagine systems have antivirus software installed, but they don’t have a reliable method of keeping it up to date. Additional controls are needed to manage this risk adequately.
Risk appetite refers to the amount of risk an organization is willing to accept
Organizations with expansionary risk appetites are willing to take on a high level of risk in pursuit of high rewards. For example, they may invest heavily in cutting-edge security technologies or aggressively pursue new business opportunities, even if they come with additional security risks.
Organizations with conservative risk appetites have a preference for low-risk investments and prioritize preserving their current security posture. For example, they may focus on implementing basic security measures or avoiding new technologies that could introduce new security risks.
Organizations with neutral risk appetites take a balanced approach to risk-taking. For example, they may adopt new technologies but with a cautious approach to implementation and invest in additional security measures to manage potential risks.
Risk tolerance
Risk tolerance is closely related to risk appetite. It refers to the organization’s ability to withstand risk. More money can withstand more financial risk.
risk management strategies
- Avoidance. An organization can avoid a risk by not providing a service or not participating in a risky activity.
- Mitigation. The organization implements controls to reduce risks.
- Acceptance. When the cost of a control outweighs the risk, an organization will often accept the risk.
- Transference. When an organization transfers the risk to another entity or at least shares the risk with another entity, that is an example of risk transference. The most common method is purchasing insurance. This moves a portion of the financial risk from the organization itself to an insurance company, which will reimburse the organization for costs or damages relating to the risk.
- Cybersecurity insurance helps protect businesses and individuals from some of the losses related to cybersecurity incidents such as data breaches and network damage. Traditional insurance policies often exclude cybersecurity risks such as the loss of data or extortion from criminals using ransomware. Organizations purchase cybersecurity insurance to help cover the gaps left by traditional insurance.
Remember This! It is not possible to eliminate risk, but you can take steps to manage it. An organization can avoid a risk by not providing a service or not participating in a risky activity. Insurance transfers the risk to another entity. You can mitigate risk by implementing controls, but when the cost of the controls exceeds the cost of the risk, an organization accepts the remaining, or residual, risk.
risk assessment
A risk assessment, or risk analysis, is an important task in risk management. It quantifies or qualifies risks based on different values or judgments. Risk assessment may be one-time, or ad hoc, assessments performed to give the organization a point-in-time view of the risk it faces. Organizations may choose to conduct these risk assessments on a recurring basis to reassess risk. For example, the organization might undergo an annual risk assessment exercise.
continuous risk assessment
Some organizations are moving toward a continuous risk assessment process where risk is constantly re-evaluated and addressed as the business and technical environment changes.
asset
An asset includes any product, system, resource, or process that an organization values,
asset value (AV)
The asset value (AV) identifies the value of the asset to the organization. It is normally a specific monetary amount. The asset value helps an organization focus on high-value assets and avoid wasting time on low-value assets.
risk control assessment
A risk control assessment (sometimes called a risk and control assessment) examines an organization’s known risks and evaluates the effectiveness of in-place controls. If a risk assessment is available, the risk control assessment will use it to identify the known risks. It then focuses on the in-place controls to determine if they adequately mitigate the known risks.
The risk control self-assessment is a risk control assessment, but employees perform it. In contrast, a risk control assessment is performed by a third-party. The danger of doing a self-assessment is that the same employees who installed the controls may be asked to evaluate their effectiveness.
Quantitative Risk Assessment
A quantitative risk assessment measures the risk of using a specific monetary amount. This monetary amount makes it easier to prioritize risks. For example, a risk with a potential loss of $30,000 is much more important than a risk with a potential loss of $1,000.
We begin the assessment of an individual risk by identifying two important factors: the asset value (AV) and the exposure factor (EF). Many organizations choose to use the replacement cost of an asset as the AV because that is the cost the organization would incur if a risk materializes. The exposure factor is the portion of an asset that we expect would be damaged if a risk materializes.
SLE
single loss expectancy. Next, we calculate the single loss expectancy (SLE) of the risk. The SLE is the cost of any single loss of a specific asset.
ARO
That brings us to the annualized rate of occurrence (ARO). The ARO indicates how many times the loss will occur in a year. If the ARO is less than 1, the ARO is represented as a percentage. For example, if you expect flooding to occur in the basement once every ten years, the ARO is 10% or 0.1. The ARO is a measure of probability/likelihood.
ALE
annualized loss expectancy (ALE).
A quantitative risk assessment uses specific monetary amounts to identify cost and asset values. The SLE identifies each loss’s cost, the ARO identifies the number of events in a typical year, and the ALE identifies the expected annual loss from the risk. You calculate the ALE as SLE × ARO. A qualitative risk assessment uses judgment to categorize risks based on the likelihood of occurrence and impact.
qualitative risk assessment
A qualitative risk assessment uses judgment to categorize risks based on the likelihood of occurrence (or probability) and impact.
Risk Reporting
The final phase of the risk assessment is risk reporting. This identifies the risks discovered during the assessment and the recommended controls.
Risk Analysis
Generically, a risk analysis identifies potential issues that could negatively impact an organization’s goals and objectives.