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ITC358 ICT Management and Information Security

Chapter 8

Risk Management: Identifying and Assessing Risk

Once we know our weaknesses, they cease to do us any harm.

G.C. Lichtenberg, German physicist, philosopher

Objectives

Upon completion of this chapter you should be able to:

Define risk management and its role in the organisation

Use risk management techniques to identify and prioritise risk factors for information assets

Assess risk based on the likelihood of adverse events and the effects on information assets when events occur

Document the results of risk identification

Introduction

Information security departments are created primarily to manage IT risk

Managing risk is one of the key responsibilities of every manager within the organisation

In any well-developed risk management program, two formal processes are at work

Risk identification and assessment

Risk control

Risk Management

“If you know the enemy and know yourself, you need not fear the result of a hundred battles

If you know yourself but not the enemy, for every victory gained you will also suffer a defeat

If you know neither the enemy nor yourself, you will succumb in every battle”

-- Sun Tzu

Knowing Yourself

Identifying, examining and understanding the information and how it is processed, stored, and transmitted

Armed with this knowledge, one can initiate an in-depth risk management program

Risk management is a process

Safeguards and controls that are devised and implemented are not install-and-forget devices

Knowing the Enemy

Identifying, examining, and understanding the threats facing the organisation’s information assets

Must fully identify those threats that pose risks to the organisation and the security of its information assets

Risk management

The process of assessing the risks to an organisation’s information and determining how those risks can be controlled or mitigated

Accountability for Risk Management

Communities of interest must work together

Evaluating the risk controls

Determining which control options are cost-effective

Acquiring or installing the appropriate controls

Overseeing processes to ensure that the controls remain effective

Identifying risks

Assessing risks

Summarising the findings

Risk Identification

Figure 8-1 Risk identification process

Source: Course Technology/Cengage Learning

Risk Identification (cont’d.)

Risk identification begins with the process of self-examination

Managers identify the organisation’s information assets

Classify them into useful groups

Prioritise them by their overall importance

Creating an Inventory of Information Assets

Identify information assets

Includes people, procedures, data and information, software, hardware, and networking elements

This step should be done without pre-judging the value of each asset

Values will be assigned later in the process

Table 8-1 Organisational assets used in systems

Source: Course Technology/Cengage Learning

Creating an Inventory of Information Assets (cont’d.)

Inventory process requires a certain amount of planning

Whether automated or manual (Laptop borrowing/remote usage logbook)

Determine which attributes of each information asset should be tracked

Depends on the needs of the organisation and its risk management efforts

Creating an Inventory of Information Assets (cont’d.)

Potential asset attributes (remote VPN)

Name, IP address

MAC address, asset type

Serial number, manufacturer name

Manufacturer’s model or part number

Software version, update revision, or FCO number

Physical location, logical location

Controlling entity

Creating an Inventory of Information Assets (cont’d.)

Identifying people, procedures and data assets

Responsibility for identifying, describing, and evaluating these information assets should be assigned to managers who possess the needed knowledge, experience, and judgment

As these assets are identified, they should be recorded using a reliable data-handling process like the one used for hardware and software

Sample attributes for people, procedures, and data assets

People

Position name/number/ID

Supervisor name/number/ID

Security clearance level

Special skills

Procedures

Description

Intended purpose

Creating an Inventory of Information Assets (cont’d.)

Sample attributes for people, procedures, and data assets (cont’d.)

Procedures (cont’d.)

Software/hardware/networking elements to which it is tied

Location where it is stored for reference

Location where it is stored for update purposes

Data

Classification

Owner/creator/manager

Size of data structure

Data structure used

Online or offline

Location

Backup procedures

Creating an Inventory of Information Assets (cont’d.)

Classifying and Categorising Assets

Determine whether the asset categories are meaningful

Inventory should also reflect each asset’s sensitivity and security priority

A classification scheme categorises information assets based on their sensitivity and security needs

Each of these categories designates the level of protection needed for a particular information asset

Classifying and Categorising Assets (cont’d.)

Some asset types, such as personnel, may require an alternative classification scheme that would identify the clearance needed to use the asset type

Classification categories must be comprehensive and mutually exclusive

Assessing Values for Information Assets

Assign a relative value:

As each information asset is identified, categorised, and classified

Comparative judgments made to ensure that the most valuable information assets are given the highest priority

Relevant questions

Which asset is the most critical to the success of the organisation?

Assessing Values for Information Assets

Relevant questions (cont’d.)

Which asset generates the most revenue?

Which asset generates the highest profitability?

Which asset is the most expensive to replace?

Which asset is the most expensive to protect?

Which asset’s loss or compromise would be the most embarrassing or cause the greatest liability?

Figure 8-2 Sample asset classification worksheet

Source: Course Technology/Cengage Learning

Listing Assets in Order of Importance

The final step in the risk identification process is to list the assets in order of importance

This goal can be achieved by using a weighted factor analysis worksheet

Table 8-2 Example weighted factor analysis worksheet

Source: Course Technology/Cengage Learning

Listing Assets in Order of Importance (cont’d.)

Threat Identification

Any organisation typically faces a wide variety of threats

If you assume that every threat can and will attack every information asset

The project scope becomes too complex

To make the process less unwieldy, each step in the threat identification and vulnerability identification processes is managed separately and then coordinated at the end

Each threat presents a unique challenge to information security

Must be handled with specific controls that directly address the particular threat and the threat agent’s attack strategy

Before threats can be assessed in the risk identification process

Each must be further examined to determine its potential to affect the targeted information asset

This process is a threat assessment

Threat Identification (cont’d.)

Table 8-3 Threats to information security

Threat Identification (cont’d.)

Source: Adapted from M. E. Whitman. Enemy at the gates: Threats to information security. Communications of the ACM, August

2003. Reprinted with permission

Threat Identification (cont’d.)

Weighted ranks of threats to information security

Threat Identification (cont’d.)

Vulnerability Assessment

Begin to review every information asset for each threat

This review leads to the creation of a list of vulnerabilities that remain potential risks to the organisation

Vulnerabilities are specific avenues that threat agents can exploit to attack an information asset

At the end of the risk identification process, a list of assets and their vulnerabilities has been developed

Threat Identification (cont’d.)

Vulnerability Assessment (cont’d.)

This list serves as the starting point for the next step in the risk management process - risk assessment

Table 8-4 Vulnerability assessment of a DMZ router

Threat Identification (cont’d.)

The TVA Worksheet

At the end of the risk identification process, a list of assets and their vulnerabilities has been developed

Another list prioritises threats facing the organisation based on the weighted table discussed earlier

These lists can be combined into a single worksheet

Threat Vulnerability Asset

Table 8-5 Sample TVA spreadsheet

The TVA Worksheet (cont’d.)

Figure 8-3 Risk identification estimate factors

Introduction to Risk Assessment

The goal is to create a method to evaluate the relative risk of each listed vulnerability

Likelihood

The overall rating of the probability that a specific vulnerability will be exploited

Often using numerical value on a defined scale (such as 0.1 – 1.0)

Using the information documented during the risk identification process, you can assign weighted scores based on the value of each information asset, i.e. 1-100, low-med-high, etc

Assessing Potential Loss

Questions to ask when assigning likelihood values

Which threats present a danger to this organisation’s assets in the given environment?

Which threats represent the most danger to the organisation’s information?

How much would it cost to recover from a successful attack?

Which threats would require the greatest expenditure to prevent?

Which of the aforementioned questions is the most important to the protection of information from threats within this organisation?

Percentage of Risk Mitigated by Current Controls

If a vulnerability is fully managed by an existing control, it can be set aside

If it is partially controlled, estimate what percentage of the vulnerability has been controlled

Uncertainty

It is not possible to know everything about every vulnerability

The degree to which a current control can reduce risk is also subject to estimation error

Uncertainty is an estimate made by the manager using judgment and experience

Risk Determination

Example

Asset A has a value of 50 and has one vulnerability, which has a likelihood of 1.0 with no current controls. Your assumptions and data are 90% accurate

Asset B has a value of 100 and has two vulnerabilities: vulnerability #2 has a likelihood of 0.5 with a current control that addresses 50% of its risk; vulnerability # 3 has a likelihood of 0.1 with no current controls. Your assumptions and data are 80% accurate

Risk Determination (cont’d.)

Example (cont’d.)

The resulting ranked list of risk ratings for the three vulnerabilities is as follows:

Asset A: Vulnerability 1 rated as 55 = (50 × 1.0) – 0% + 10%

Asset B: Vulnerability 2 rated as 35 = (100 × 0.5) – 50% + 20%

Asset B: Vulnerability 3 rated as 12 = (100 × 0.1) – 0 % + 20%

Likelihood and Consequences

Likelihood and consequence rating

Another approach

From the Australian and New Zealand Risk Management Standard 4360i

Uses qualitative methods of determining risk based on a threat’s probability of occurrence and expected results of a successful attack

Consequences (or impact assessment) are evaluated on 5 levels ranging from insignificant (level 1) to catastrophic (level 5), as assessed by the organisation

Qualitative likelihood assessments levels are represented by values ranging from A (almost certain) to E (rare), as determined by the organisation

Identify Possible Controls

For each threat and its associated vulnerabilities that have residual risk, create a preliminary list of control ideas

Three general categories of controls exist:

Policies

Programs

Technical controls

Likelihood and Consequences (cont’d.)

Table 8-6 Consequence levels for organisational threats

Source: Risk management plan templates and forms from www.treasury.act.gov.au/actia/Risk.htm

Likelihood and Consequences (cont’d.)

Table 8-7 Likelihood levels for organisational threats

Source: Risk management plan templates and forms from www.treasury.act.gov.au/actia/Risk.htm

Likelihood and Consequences (cont’d.)

Consequences and likelihoods are combined

Enabling the organisation to determine which threats represent the greatest danger to the organisation’s information assets

The resulting rankings can then be inserted into the TVA tables for use in risk assessment

Likelihood and Consequences (cont’d.)

Table 8-8 Qualitative risk analysis matrix

Source: Risk management plan templates and forms from www.treasury.act.gov.au/actia/Risk.htm

Documenting the Results of Risk Assessment

Goals of the risk management process

To identify information assets and their vulnerabilities

To rank them according to the need for protection

In preparing this list, a wealth of factual information about the assets and the threats they face is collected

Information about the controls that are already in place is also collected

The final summarised document is the ranked vulnerability risk worksheet

Table 8-9 Ranked vulnerability risk worksheet

Source: Course Technology/Cengage Learning

Documenting the Results of Risk Assessment (cont’d.)

What should the documentation package look like?

What are the deliverables from this stage of the risk management project?

The risk identification process should designate what function the reports serve, who is responsible for preparing them, and who reviews them

Table 8-10 Risk identification and assessment deliverables

Documenting the Results of Risk Assessment (cont’d.)

Source: Course Technology/Cengage Learning

Summary

Introduction

Risk management

Risk identification

Risk assessment

Documenting the results of risk assessment