Domain 2: Information Risk Management (30%) Flashcards
What are Threats, Vulnerabilities, and Risks
Before we move too deeply into the risk assessment process, let’s define a few important terms that we’ll use during our discussion:
Threats are any possible events that might have an adverse impact on the confidentiality, integrity, and/or availability of our information or information systems.
Vulnerabilities are weaknesses in our systems or controls that could be exploited by a threat.
Risks occur at the intersection of a vulnerability and a threat that might exploit that vulnerability. A threat without a corresponding vulnerability does not pose a risk, nor does a vulnerability without a corresponding threat.
What is an enterprise risk management (ERM) program for?
enterprise risk management (ERM) program, organizations take a formal approach to risk analysis that begins with identifying risks, continues with determining the severity of each risk, and then results in adopting one or more risk management strategies to address each risk.
What is the Risk Identification process?
The risk identification process requires identifying the threats and vulnerabilities that exist in your operating environment. These risks may come from a wide variety of sources ranging from malicious hackers to hurricanes.
What are some of the different categories of risk facing organizations?
External risks are those risks that originate from a source outside the organization. This is an extremely broad category of risk, including cybersecurity adversaries, malicious code, and natural disasters, among many other types of risk.
Internal risks are those risks that originate from within the organization. They include malicious insiders, mistakes made by authorized users, equipment failures, and similar risks.
Multiparty risks are those that impact more than one organization. For example, a power outage to a city block is a multiparty risk because it affects all of the buildings on that block. Similarly, the compromise of an SaaS provider’s database is a multiparty risk because it compromises the information of many different customers of the SaaS provider.
Legacy systems pose a unique type of risk to organizations. These outdated systems often do not receive security updates, and cybersecurity professionals must take extraordinary measures to protect them against unpatchable vulnerabilities.
Intellectual property (IP) theft risks occur when a company possesses trade secrets or other proprietary information that, if disclosed, could compromise the organization’s business advantage.
Software compliance/licensing risks occur when an organization licenses software from a vendor and intentionally or accidentally runs afoul of usage limitations that expose the customer to financial and legal risk.
Risk Calculation
Not all risks are equal. Returning to the example of a pedestrian on the street, the risk of being hit by a bicycle is far more worrisome than the risk of being struck down by a meteor. That makes intuitive sense, but let’s explore the underlying thought process that leads to that conclusion. It’s a process called risk calculation.
When we evaluate any risk, we do so by using two different factors?
The likelihood of occurrence, or probability, that the risk will occur. We might express this as the percentage of chance that a threat will exploit a vulnerability over a specified period of time, such as within the next year.
The magnitude of the impact that the risk will have on the organization if it does occur. We might express this as the financial cost that we will incur as the result of a risk, although there are other possible measures.
Using these two factors, we can assign each risk a conceptual score by combining the probability and the magnitude. This leads many risk analysts to express the severity of a risk using this formula:
Risk Severity = Likelihood × Impact
What are Risk Assessments?
Risk assessments are a formalized approach to risk prioritization that allows organizations to conduct their reviews in a structured manner. Risk assessments follow two different analysis methodologies:
Quantitative risk assessments use numeric data in the analysis, resulting in assessments that allow the very straightforward prioritization of risks.
Qualitative risk assessments substitute subjective judgments and categories for strict numerical analysis, allowing the assessment of risks that are difficult to quantify.
Quantitative Risk Assessment
Most quantitative risk assessment processes follow a similar methodology that includes the following steps:
Determine the asset value (AV) of the asset affected by the risk. This asset value (AV) is expressed in dollars, or other currency, and may be determined by using the cost to acquire the asset, the cost to replace the asset, or the depreciated cost of the asset, depending on the organization’s preferences.
Determine the likelihood that the risk will occur. Risk analysts consult subject matter experts and determine the likelihood that a risk will occur in a given year. This is expressed as the number of times the risk is expected to happen each year and is described as the annualized rate of occurrence (ARO). A risk that is expected to occur twice a year has an ARO of 2.0, whereas a risk that is expected once every one hundred years has an ARO of 0.01.
Determine the amount of damage that will occur to the asset if the risk materializes. This is known as the exposure factor (EF) and is expressed as the percentage of the asset expected to be damaged. The exposure factor of a risk that would completely destroy an asset is 100 percent, whereas a risk that would damage half of an asset has an EF of 50 percent.
Calculate the single loss expectancy. The single loss expectancy (SLE) is the amount of financial damage expected each time this specific risk materializes. It is calculated by multiplying the AV by the EF.
Calculate the annualized loss expectancy. The annualized loss expectancy (ALE) is the amount of damage expected from a risk each year. It is calculated by multiplying the SLE and the ARO.
Qualitative Risk Assessment
Quantitative techniques work very well for evaluating financial risks and other risks that can be clearly expressed in numeric terms. Many risks, however, do not easily lend themselves to quantitative analysis. For example, how would you describe reputational damage, public health and safety, or employee morale in quantitative terms? You might be able to draw some inferences that tie these issues back to financial data, but the bottom line is that quantitative techniques simply aren’t well suited to evaluating these risks.
Qualitative risk assessment techniques seek to overcome the limitations of quantitative techniques by substituting subjective judgment for objective data. Qualitative techniques still use the same probability and magnitude factors to evaluate the severity of a risk but do so using subjective categories. For example, Figure 3.2 shows a simple qualitative risk assessment that evaluates the probability and magnitude of several risks on a subjective Low/Medium/High scale. Risks are placed on this chart based on the judgments made by subject matter experts.
What is a SUPPLY CHAIN ASSESSMENT?
When evaluating the risks to your organization, don’t forget about the risks that occur based on third-party relationships. You rely on many different vendors to protect the confidentiality, integrity, and availability of your data. Performing vendor due diligence is a crucial security responsibility.
Reassessing Risk
Reassessing Risk
Risk assessment is not a one-time project—it is an ongoing process. A variety of internal and external factors change over time, modifying existing risk scenarios and creating entirely new potential risks. For example, if a new type of attacker begins targeting organizations in your industry, that is a new risk factor that should prompt a reassessment of risk. Similarly, if you enter a new line of business, that also creates new potential risks.
Risk Treatment and Response
With a completed risk assessment in hand, organizations can then turn their attention to addressing those risks. Risk treatment is the process of systematically responding to the risks facing an organization. The risk assessment serves two important roles in the risk management process:
The risk assessment provides guidance in prioritizing risks so that the risks with the highest probability and magnitude are addressed first.
Quantitative risk assessments help determine whether the potential impact of a risk justifies the costs incurred by adopting a specific risk management approach.
Risk mitigation is?
Risk mitigation is the process of applying security controls to reduce the probability and/or magnitude of a risk. Risk mitigation is the most common risk management strategy, and the vast majority of the work of security professionals revolves around mitigating risks through the design, implementation, and management of security controls. Many of these controls involve engineering tradeoffs between functionality, performance, and security.
How many controls can yuou apply for risk mitigation?
When you choose to mitigate a risk, you may apply one security control or a series of security controls. Each of those controls should reduce the probability that the risk will materialize, the magnitude of the risk should it materialize, or both the probability and magnitude.
Risk Avoidance is?
Risk avoidance is a risk management strategy by which we change our business practices to completely eliminate the potential that a risk will materialize. Risk avoidance may initially seem like a highly desirable approach. After all, who wouldn’t want to eliminate the risks facing their organization?
What is Risk Transference?
Risk transference shifts some of the impact of a risk from the organization experiencing the risk to another entity. The most common example of risk transference is purchasing an insurance policy that covers a risk. When purchasing insurance, the customer pays a premium to the insurance carrier. In exchange, the insurance carrier agrees to cover losses from risks specified in the policy.
What is Risk Acceptance?
Risk acceptance is the final risk management strategy, and it boils down to deliberately choosing to take no other risk management strategy and to simply continue operations as normal in the face of the risk. A risk acceptance approach may be warranted if the cost of mitigating a risk is greater than the impact of the risk itself.
inherent risk
The inherent risk facing an organization is the original level of risk that exists before implementing any controls. Inherent risk takes its name from the fact that it is the level of risk inherent in the organization’s business.
residual risk
The residual risk is the risk that remains after an organization implements controls designed to mitigate, avoid, and/or transfer the inherent risk.
Risk appetite
An organization’s risk appetite is the level of risk that the organization is willing to accept as a cost of doing business.
CONTROL RISK
The world of public accounting brings us the concept of control risk. Control risk is the risk that arises from the potential that a lack of internal controls within the organization will cause a material misstatement in the organization’s financial reports.
What is Risk Reporting?
As risk managers work to track and manage risks, they must communicate their results to other risk professionals and business leaders. The risk register is the primary tool that risk management professionals use to track risks facing the organization. Figure 3.4 shows an excerpt from a risk register used to track IT risks in higher education.
Disaster recovery planning (DRP)
The discipline of developing plans to recover operations as quickly as possible in the face of a disaster.
The disaster recovery planning process creates a formal, broad disaster recovery plan for the organization and, when required, develops specific functional recovery plans for critical business functions
Business impact analysis (BIA)
A formal process designed to identify the mission-essential functions within an organization and facilitate the identification of the critical systems that support those functions.
Business impact analysis (BIA)
The business impact analysis (BIA) is a formal process designed to identify the mission-essential functions within an organization and facilitate the identification of the critical systems that support those functions.
Four core metrics are used in the BIA process are?
MTBF, RTTO, RPPO, and MTTR
Single points of failure
These are systems, devices, or other components that, if they fail, would cause an outage. For example, if a server only has one power supply, the failure of that power supply would bring down the server, making it a single point of failure.
Privacy
Cybersecurity professionals are responsible for protecting the confidentiality, integrity, and availability of all information under their care.
This includes personally identifiable information (PII) that, if improperly disclosed, would jeopardize the privacy of one or more individuals.
Privacy notice
Organizations seeking to codify their privacy practices may adopt a privacy notice that outlines their privacy commitments. In some cases, laws or regulations may require that organizations adopt a privacy notice.
Sensitive Information Inventory
Organizations often deal with many different types of sensitive and personal information. The first step in managing this sensitive data is developing an inventory of the types of data maintained by the organization and the places where it is stored, processed, and transmitted.
What should Organizations include in the types of information in their inventory:
Personally identifiable information (PII) includes any information that uniquely identifies an individual person, including customers, employees, and third parties.
Protected health information (PHI) includes medical records maintained by health-care providers and other organizations that are subject to the Health Insurance Portability and Accountability Act (HIPAA).
Financial information includes any personal financial records maintained by the organization.
Government information maintained by the organization may be subject to other rules, including the data classification requirements discussed in the next section.
What should the data owner do to protect their data in the organization?
One of the most important things that we can do to protect our data is to create clear data ownership policies and procedures. Using this approach, the organization designates specific senior executives as the data owners for different data types. For example, the vice president of Human Resources might be the data owner for employment and payroll data, whereas the vice president for Sales might be the data owner for customer information.
What do DATA PROTECTION OFFICERS do?
Organizations should identify a specific individual who bears overall responsibility for carrying out the organization’s data privacy efforts. This person, often given the title of chief privacy officer, bears the ultimate responsibility for data privacy and must coordinate across functional teams to achieve the organization’s privacy objectives.
What do data retention standards do?
At the end of the lifecycle, the organization should implement data retention standards that guide the end of the data lifecycle. Data should be kept for only as long as it remains necessary to fulfill the purpose for which it was originally collected. At the conclusion of its lifecycle, data should be securely destroyed.
What is purpose limitation?
Although information remains within the care of the organization, the organization should practice purpose limitation. This means that information should be used only for the purpose that it was originally collected and that was consented to by the data subjects.
What is data minimization?
At the early stages of the data lifecycle, organizations should practice data minimization, where they collect the smallest possible amount of information necessary to meet their business requirements. Information that is not necessary should either be immediately discarded or, better yet, not collected in the first place.
What is the difference between a data owner and a data steward?
Data controllers are the entities who determine the reasons for processing personal information and direct the methods of processing that data. This term is used primarily in European law, and it serves as a substitute for the term data owner to avoid a presumption that anyone who collects data has an ownership interest in that data.