Use COBIT Manage Access Compliance

2004 San Francisco ISACA Fall Conference
Session S23 Use of COBIT as a Risk Management & Audit Framework for Access Compliance
Presented on October 5, 2004 by Lance M. Turcato, CISM, CISA, CPA
Speaker
Lance M. Turcato, CISM, CISA, CPA

Managing Director Access Assessment & Policy Compliance Information Security Administration Charles Schwab & Co., Inc. Email: lance.turcato@schwab.com Phone: 602-977-4376
October 5, 2004
Slide 2
Guest Speaker
Marta OShea, CISA

Senior Manager Technology Infrastructure & Security Oversight Internal Audit Department Charles Schwab & Co., Inc. Email: marta.oshea@schwab.com Phone: 415-636-7348
October 5, 2004
Slide 3
Audience Poll
COBIT Knowledge
- First exposure? - General understanding? - Strong knowledge of COBIT framework?
Current Users of COBIT

- Incorporated Into Audit Process? - Adopted by IT Management? - Users of a framework other than COBIT?
October 5, 2004
Slide 4
Agenda
Topic
Overview of COBIT Framework
- COBIT Mission, Objectives, Scope, & Components - COBIT Role In IT Governance - COBIT Family - Framework - Control Objectives - Audit Guidelines - Management Guidelines 6 7 8 9 17 26 30
Page
COBIT As An Audit Framework

- Process for Implementing COBIT - Audit Approach Overview 40 47
COBIT As A Risk Framework For Information Security

- Defining Security Requirements - Measuring Security & Assessing Risk - Available Tools 60 63 70
October 5, 2004
Slide 5
Overview of COBIT Framework
Source of Information IT Governance Institute (http://www.itgi.org/ )
COBITs Mission, Scope & Objectives

Mission: To research, develop, publicize and promote an authoritative, up-to-date, international set of generally accepted Information Technology Control Objectives for day-to-day use by business managers and auditors. Scope & Objectives:
Generally applicable and accepted international standard for good practice for Information Technology controls For application to enterprise-wide information systems, regardless of technology employed ( generic ) Focused on business requirements for information Management - business process owner - oriented Based on IT Governance Institute Control Objectives
! !
October 5, 2004
aligned with the de jure and de facto standards and regulations based on critical review of tasks and activities or function
2004 San Francisco ISACA Fall Conference Slide 7
COBITs Role In IT Governance IT Governance Framework

Address Gaps IT Management Sets Measurable Goals
Compare Results
Deliver Against Goals
Apply Consistent Control Framework
Internal Audit
October 5, 2004
Measure Performance
COBIT Family 3rd Edition
There is a Method...
Heres How You Implement... The Method Is...
Heres How You Measure Your Performance
Minimum Controls Are...
Heres How You Audit...
October 5, 2004
Slide 9
COBIT Pieces of The Puzzle

Executive Summary Framework Control Objectives Audit Guidelines Management Guidelines Implementation Tool Set
# Executive Summary
- Senior Executives (CEO, CIO)
Provides awareness on key concepts for Senior Management.
# Framework - Senior Operational Management (Directors of IT and IS Audit / Controls) # Control Objectives - Middle Management (Mid-Level IT Management and IS
Audit/Controls Managers / Seniors) Operations Manager and Auditor)
Describes 34 high-level objectives.
# Audit Guidelines - Line Management and Controls Practitioner (Applications or # Management Guidelines - Senior Operational Management, Director of IS, Mid-Level
IT Management and IT Audit / Control Managers Management and IS Audit/Control Managers
Critical Success Factors, Key Performance Indicators, Key Goal Indicators, Maturity Model. Suggested audit procedures.
Statements of desired results by implementing 318 specific control objectives.
# Implementation Tool Set
- Director of IS and Audit/Control, Mid-Level IS
Suggested implementation tools and implementation success stories.

October 5, 2004 2004 San Francisco ISACA Fall Conference Slide 10
COBIT As An IT Control Framework

$Starts
Framework
from the premise that IT needs to deliver the information that the enterprise needs to achieve its objectives $Promotes process focus and process ownership $Divides IT into 34 processes belonging to four domains (providing a high level control objective for each process)
$Looks
IT Domains
$Planning $Acquiring $Delivery
& Implementing
& Support
$Monitoring
at fiduciary, quality and security needs of enterprises, providing seven information criteria that can be used to generically define what the business requires from IT
Information Criteria
$Effectiveness $Efficiency $Availability $Integrity $Confidentiality $Reliability $Compliance
$Is
supported by a set of over 300 detailed control objectives
October 5, 2004
Slide 11
COBIT Framework - Components
Framework
#IT Domains & Processes #Information Criteria = Business Requirements #IT Resources Information Criteria
ty ali Qu ia r uc Fid y
Se
ity ur c
IT Processes
Processes
October 5, 2004
IT
Re s
Slide 12
ou
Activities
rc e
IT Processes
IT Resources
People Application Systems Technology Facilities Data
Business Requirements
Domains
COBIT Domains of Processes & Activities
Framework
Domains
Business Requirements IT Processes IT Resources
Natural grouping of processes, often matching an organizational domain of responsibility. A series of joined activities with natural (control) breaks.
Processes
Activities
Actions needed to achieve a measurable result. Activities have a life-cycle whereas tasks are discreet.
October 5, 2004
Slide 13
Framework
Business Requirements = Information Criteria

Quality Requirements Quality Cost Delivery Fiduciary Requirements (COSO Report) Effectiveness and Efficiency of Operations Reliability of Financial Reporting Compliance with Laws and Regulations Security Requirements Confidentiality Integrity Availability
IT Resources
Framework
Data: Data objects in their widest sense (i.e., external and internal, structured and non-structured, graphics, sound, etc.)
Application Systems: understood to be the sum of manual and programmed procedures. Technology: covers hardware, operating systems, database management systems, networking, multimedia, etc. Facilities: Resources to house and support information systems. People: Staff skills, awareness and productivity to plan, organize, acquire, deliver, support and monitor information systems and services.
October 5, 2004
Slide 15
COBIT Framework - Examples

Domains
Framework
Processes
IT Processes
Activities
IT Resources
IT Domains
Planning & Organization Acquisition & Implementation Delivery & Support Monitoring
IT Processes
IT strategy Change Management Contingency Planning Problem Management Policy & Procedures Feasibility Study Acceptance Testing etc...
Activities
record new problem analyze propose solution monitor solution record known problem etc...
October 5, 2004
Slide 16
COBIT Framework Illustrated
Framework
COBITs Golden Rule

In order to provide the information that the organization needs to achieve its objectives, IT resources need to be managed by a set of naturally grouped processes.
-IT Governance Institute
October 5, 2004
Slide 17
Linking The Processes To Control Objectives

(34 High-level and 300+ Detailed Objectives)
Control Objectives
COBITs Waterfall and Navigation Aids

linking Process, Resource & Criteria
Planning & Organisation
Information Criteria
s y es y ty ce ity lit l en enc tia rity bili ian v i l i bi n ct ffic ide teg aila mp lia fe e re in av co nf ef co
Acquisition &
Implementation
S S
Delivery & Support
Process Domains
Monitoring
The control of
IT Processes
which satisfy
is enabled by
Control Statements
and considers
% %
ns y s e pl atio log itie ta eo lic no cil da p p fa ch ap te
Control Practices
October 5, 2004 2004 San Francisco ISACA Fall Conference
IT Resources
Slide 18
Linking The Processes To Control Objectives

(Example) Control over the IT process of
DEFINING A STRATEGIC IT PLAN
Control Objectives
that satisfies the business requirement

to strike an optimum balance of information technology opportunities and IT business requirements as well as ensuring its further accomplishment
is enabled by
a strategic planning process undertaken at regular intervals giving rise to long-term plans; the long-term plans should periodically be translated into operational plans setting clear and concrete short-term goals
and takes into consideration: #enterprise business strategy

#definition of how IT supports the business objectives #inventory of technological solutions and current infrastructure #monitoring the technology markets #timely feasibility studies and reality checks #existing systems assessments #enterprise position on risk, time-to-market, quality #need for senior management buy-in, support and critical review
COBIT IT Processes/High-Level Objectives
Control Objectives
Planning and Organization

PO 1 PO 2 PO 3 PO 4 PO 5 PO 6 PO 7 PO 8 PO 9 PO 10 PO 11 Define a Strategic IT Plan Define the Information Architecture Determine Technological Direction Define the IT Organization and Relationships Manage the IT Investment Communicate Management Aims and Direction Manage Human Resources Ensure Compliance with External Requirements Assess Risks Manage Projects Manage Quality
October 5, 2004
Slide 20
Control Objectives
Acquisition and Implementation

AI 1 AI 2 AI 3 AI 4 AI 5 AI 6 Identify Automated Solutions Acquire and Maintain Application Software Acquire and Maintain Technology Infrastructure Develop and Maintain Procedures Install and Accredit Systems Manage Changes
October 5, 2004
Slide 21

Delivery and Support
DS 1 DS 2 DS 3 DS 4 DS 5 DS 6 DS 7 DS 8 DS 9 DS 10 DS 11 DS 12 DS 13
October 5, 2004
Control Objectives
Define and Manage Service Levels Manage Third-Party Services Manage Performance and Capacity Ensure Continuous Service Ensure Systems Security Identify and Allocate Costs Educate and Train Users Assist and Advise Customers Manage the Configuration Manage Problems and Incidents Manage Data Manage Facilities Manage Operations
Control Objectives
Monitoring
M1 M2 M3 M4 Monitor the Processes Assess Internal Control Adequacy Obtain Independent Assurance Provide for Independent Audit
October 5, 2004
Slide 23
Example Control Objectives For A Process

DOMAIN: Planning and Organization (PO)
Control Objectives
PROCESS (High-level Control Objective): Define a Strategic IT Plan (PO 1) DETAILED CONTROL OBJECTIVES: PO 1.1 PO 1.2 PO 1.3 PO 1.4 PO 1.5 PO 1.6 PO 1.7 PO 1.8 IT as Part of the Organizations Long- and Short-Range Plan Next Slide IT Long-Range Plan IT Long-Range Planning Approach and Structure IT Long-Range Plan Changes Short-Range Planning for the IT Function Communication of IT Plans Monitoring and Evaluating of IT Plans Assessment of Existing Systems
October 5, 2004
Slide 24
Example Control Objectives For A Process

DEFINE A STRATEGIC INFORMATION TECHNOLOGY PLAN (PO 1)
Control Objectives
PO 1.1 - IT as Part of the Organizations Long- and Short-Range Plan CONTROL OBJECTIVE Senior management is responsible for developing and implementing long- and short-range plans that fulfill the organizations mission and goals. In this respect, senior management should ensure that IT issues as well as opportunities are adequately assessed and reflected in the organizations long- and short-range plans. IT longand short-range plans should be developed to help ensure that the use of IT is aligned with the mission and business strategies of the organization.
Summary of COBIT At This Point
Control Objectives
# Framework defines a construct for reviewing IT. # Four domains are identified. # Within each domain there are processes -- 34 total. # Within each process there are high-level IT control objectives defining controls that should be in place. # For each of the 34 processes, there are from 3 to 30 detailed IT control objectives (300+ in total). # IT control objectives are generic and applicable to all environments. # COBIT is a systematic and logical method for defining and communicating IT control objectives.
COBIT Audit Guidelines - Purpose
Audit Guidelines
COBIT provides detailed audit guidelines for each of the 34 IT processes

&Enables the auditor to review specific IT processes against COBITs Control Objectives to determine where controls are sufficient or advise management where processes need to be improved. &Helps process owners answer questions - Is what Im doing adequate? And, if not, how do I fix it?
COBIT Audit Guidelines - Objectives

& To provide a simple, generic, and high-level structure for
auditing IT controls
! ! ! !
Audit Guidelines
based on generally accepted audit practices Aligned with the COBIT framework generic for applicability to varying audit objectives and practices providing clear policies and good practices for security and control of information and related technologies ! enabling the development of specific audit programs or the enhancement of existing programs
& To enable auditors to review IT processes against COBITs

recommended detailed control objectives to provide management assurance and/or advice for improvement
! ! ! !
a tool for creating the overall audit plan a tool for providing audit training a solution for audit automation (although there are lots of opportunities) exhaustive or definitiveguidelines will continue to evolve
& The Audit Guidelines are NOT intended as
October 5, 2004
COBIT Management Guidelines

COBIT 3rd Edition added a Management and Governance layer, providing management with a toolbox containing
# A maturity model to assist in benchmarking and decision-making for control over IT # A list of critical success factors (CSF) that provides succinct nontechnical best practices for each IT process
Management Guidelines
# Generic and action oriented performance measurement elements (key performance indicators [KPI] and key goal indicators [KGI] - outcome measures and performance drivers for all IT processes)
Purpose IT Control profiling what is important? Awareness where is the risk? Benchmarking - what do others do?
Maturity Model
Method of scoring the maturity of IT processes
GAP Analysis (Current Vs. Goal)
Managements Target Goal
derived from the maturity model defined by the Software Engineering Institute for the maturity of software development.
Maturity Model - GENERIC

Generic Maturity Model
0 Non-Existent. Complete lack of any recognisable processes. The organisation has not even recognised that there is an issue to be addressed. 1 Initial. There is evidence that the organisation has recognised that the issues exist and need to be addressed. There are however no standardised processes but instead there are ad hoc approaches that tend to be applied on an individual or case by case basis. The overall approach to management is disorganised. 2 Repeatable. Processes have developed to the stage where similar procedures are followed by different people undertaking the same task. There is no formal training or communication of standard procedures and responsibility is left to the individual. There is a high degree of reliance on the knowledge of individuals and therefore errors are likely. 3 Defined. Procedures have been standardised and documented, and communicated through training. It is however left to the individual to follow these processes, and it is unlikely that deviations will be detected. The procedures themselves are not sophisticated but are the formalisation of existing practices. 4 Managed. It is possible to monitor and measure compliance with procedures and to take action where processes appear not to be working effectively. Processes are under constant improvement and provide good practice. Automation and tools are used in a limited or fragmented way. 5 Optimised. Processes have been refined to a level of best practice, based on the results of continuous improvement and maturity modelling with other organisations. IT is used in an integrated way to automate the workflow, providing tools to improve quality and effectiveness, making the enterprise quick to adapt.
October 5, 2004
Slide 31
Maturity Model PROCESS SPECIFIC

DS5 Ensure System Security
Rating
0 Non-Existent
Description
The organization does not recognize the need for IT security. Responsibilities and accountabilities are not assigned for ensuring security. Measures supporting the management of IT security are not implemented. There is no IT security reporting and no response process to IT security breaches. There is a complete lack of a recognizable system security administration process. The organization recognizes the need for IT security, but security awareness depends on the individual. IT security is addressed on a reactive basis and not measured. IT security breaches invoke "finger pointing" responses if detected, because responsibilities are unclear. Responses to IT security breaches are unpredictable.
1 Initial
2 Repeatable
Responsibilities and accountabilities for IT security are assigned to an IT security co-ordinator with no management authority. Security awareness is fragmented and limited. IT security information is generated, but is not analyzed. Security solutions tend to respond reactively to IT security incidents and by adopting third-party offerings, without addressing the specific needs of the organization. Security policies are being developed, but inadequate skills and tools are still being used. IT security reporting is incomplete, misleading or not pertinent. Security awareness exists and is promoted by management. Security awareness briefings have been standardized and formalized. IT security procedures are defined and fit into a structure for security policies and procedures. Responsibilities for IT security are assigned, but not consistently enforced. An IT security plan exists, driving risk analysis and security solutions. IT security reporting is IT focused, rather than business focused. Ad hoc intrusion testing is performed.
3 Defined
4 Managed
Responsibilities for IT security are clearly assigned, managed and enforced. IT security risk and impact analysis is consistently performed. Security policies and practices are completed with specific security baselines. Security awareness briefings have become mandatory. User identification, authentication and authorization are being standardized. Security certification of staff is being established. Intrusion testing is a standard and formalized process leading to improvements. Cost/benefit analysis, supporting the implementation of security measures, is increasingly being utilized. IT security processes are co-ordinated with the overall organization security function. IT security reporting is linked to business objectives.
5 Optimized
IT security is a joint responsibility of business and IT management and is integrated with corporate security business objectives. IT security requirements are clearly defined, optimized and included in a verified security plan. Security functions are integrated with applications at the design stage and end users are increasingly accountable for managing security. IT security reporting provides early warning of changing and emerging risk, using automated active monitoring approaches for critical systems. Incidents are promptly addressed with formalized incident response procedures supported by automated tools. Periodic security assessments evaluate the effectiveness of implementation of the security plan. Information on new threats and vulnerabilities is systematically collected and analyzed, and adequate mitigating controls are promptly communicated and implemented. Intrusion testing, root cause analysis of security incidents and pro-active identification of risk is the basis for continuous improvements. Security processes and technologies are integrated organization wide.
October 5, 2004
Slide 32
Measuring Success
& Critical Success Factors

What are the most important things to do to increase the probability of success of the process?
! Example: (DS4) Critical infrastructure components are identified and continuously monitored.
& Key Performance Indicators

Measures how well the process is performing
! Example: (DS4) Number of outstanding continuous service issues not resolved or addressed.
& Key Goal Indicators

Measures whether an IT process achieved its business requirements
! Examples: (DS4) No incidents causing public embarassment. Number of critical business processes relying on IT that have adequate continuity plans.
October 5, 2004
Slide 33
CSF Critical Success Factors
Management oriented IT control implementation guidance that are observable usually measurable characteristics of the organization and processes.
# Most important things that contribute to the IT process achieving its

goal Strategically Technically Organizationally Process or Procedure # Visible and measurable signs of success
The control of
IT Processes
which satisfy
is enabled by
Control Statements
and considers
# Control Statements and Considerations of the Waterfall # Short, focused and action oriented - Focus on obtaining, maintaining
and leveraging capability and skills
Control Practices
Slide 34
KGI Key Goal Indicators
Measurable indicators of the process achieving its goal.

# # # # # #
Describe the outcome of the process and are therefore lag indicators (i.e., measurable after the fact) Are indicators of the success of the process, but may be expressed as well in terms of the business contribution, if that contribution is specific to that IT process Represent the process goal (i.e., a measure of what target to achieve) Are IT oriented, but business driven (Business Requirements from Waterfall) Are expressed in precise measurable terms, wherever possible Focus on those information criteria that The control of have been identified to be of most IT Processes importance for the process which satisfy
is enabled by
Control Statements
and considers
Control Practices
October 5, 2004
Slide 35
KPI Key Performance Indicators
Measurable indicators of performance of the enabling factors.
# Are a measure of how well the process is performing # Predict the probability of success or failure in the future (, i.e., LEAD
indicators) # Are expressed in precise, measurable terms # How well managment leverages / manages the resources needed for the process # Control Statements & Control Practices from Waterfall # Are process oriented, but IT driven The control of # Help in improving the IT process
IT Processes
which satisfy
is enabled by
Control Statements
and considers
Control Practices
October 5, 2004
Slide 36
CSF, KGI, KPI Examples

Critical Success Factors

IT performance is measured in financial terms, in relation to customer satisfaction, for process effectiveness and for future capability, and IT management is rewarded based on these measures The processes are aligned with the IT strategy and with the business goals; they are scalable and their resources are appropriately managed and leveraged Everyone involved in the process is goal focused and has the appropriate information on customers, on internal processes and on the consequences of their decisions A business culture is established, encouraging cross-divisional co-operation and teamwork, as well as continuous process improvement Control practices are applied to increase transparency, reduce complexity, promote learning, provide flexibility and allow scalability Goals and objectives are communicated across all disciplines and are understood It is known how to implement and monitor process objectives and who is accountable for process performance A continuous process quality improvement effort is applied There is clarity on who the customers of the process are The required quality of staff (training, transfer of information, morale, etc.) and availability of skills (recruit, retain, re-train) exist
Key Performance Indicators

System downtime Throughput and response times Amount of errors and rework Number of staff trained in new technology and customer service skills Benchmark comparisons Number of non-compliance reportings Reduction in development and processing time
Key Goal Indicators

Increased level of service delivery Number of customers and cost per customer served Availability of systems and services Absence of integrity and confidentiality risks Cost efficiency of processes and operations Confirmation of reliability and effectiveness Adherence to development cost and schedule Cost efficiency of the process Staff productivity and morale Number of timely changes to processes and systems Improved productivity (e.g., delivery of value per employee)
October 5, 2004
Slide 37
COBIT As An Audit Framework A Success Story

Additional Information COBIT Case Study (http://www.itgi.org/casestudy4.htm) (http://www.isaca.org/ctcase27.htm)
Process For Implementing COBIT

Recognize Need
Integrating COBIT
Educate Senior IT Management Map COBIT to FFIEC Examination Guidelines
Into IT Governance, Risk Management, & Systems Audit Approach

Facilitate Assessment Work Sessions with Client Analyze, Document, Validate Results, Report To Management
Map Audit Universe to COBIT High Level Control Objectives Map Annual Audit Plan to COBIT Detailed Level Control Objectives (IT Activities) Develop Questionnaire / Joint Risk Self-Assessment
The Need Increased Regulatory Focus

Regulatory Ratings Overall (UFIRS) & IT-Specific (URSIT)
Uniform Financial Institution Rating System (UFIRS) Composite Score (1-5)
UFIRS rating reflects institution safety and soundness. IT (URSIT) is one of many components evaluated to determine the UFIRS score.
URSIT Rating Criteria 1 = Strong 2 = Satisfactory 3 = Less than Satisfactory 4 = Deficient 5 = Critically Deficient
Uniform Rating System for Information Technology (URSIT) Composite Score (1-5)
Federal Reserve Issued SR 99-8 (SUP) March 31, 1999 references COBIT
Note inverted scale: Fed rating of 5 is deficient and COBIT rating of 5 is Optimized
COBIT Maturity Ratings
COBIT Maturity Ratings 0 = Non-Existent 1 = Initial 2 = Repeatable 3 = Defined 4 = Managed 5 = Optimized
October 5, 2004
Slide 40
Educating Senior IT Management Encouraging Senior IT Management To Adopt COBIT

& Framework for Risk Self-Assessment (RSA) process & Emphasize business orientation (NOT audit orientation) & Emphasize value of self-assessment, performance measurement and benchmarking ' provide real examples & Knowledge that COBIT is based on industry standards with input from many sources & Resource for regulatory examinations & During rollout 'monitor progress and report on results
Educating IT Management At All Levels

& Executive summary focus for senior management & Workshops for line management and key technicians & Integration with the audit process (engagement memos, audit kick-off meetings, work sessions, reporting)
Linking COBIT To Other Sources of Best Practice

COBIT Ref.
COBIT Domains & Control Objectives

PLANNING & ORGANIZATION
COBIT objectives mapped to relevant FFIEC examination criteria
FFIEC Ref.
FFIEC Chapter Title & Relevant Section
PO1 Define a Strategic IT Plan 1.1 IT as Part of the Organization's Long- and Short-Range Plan 1.2 IT Long-Range Plan 1.3 IT Long-Range Planning, Approach & Structure 1.4 IT Long-Range Plan Changes 1.5 Short-Range Planning for the IT Function 1.6 Communication of IT Plans 1.7 Monitoring & Evaluating of IT Plans 1.8 Assessment of Existing Systems PO2 Define the Information Architecture 2.1 Information Architecture Model 2.2 Corporate Data Dictionary & Data Syntax Rules 2.3 Data Classification Scheme 2.4 Security Levels
10-1 9-6 9-6 9-6 9-6 9-6 9-8 12-2
Corporate Contingency Planning Responsibilities Planning Planning Planning Planning Planning Controls System Development Standards
14-1 14-2
Security Administration and Accountability Security Plan
r llust I
y Onl n atio
Other considerations ' map to relevant ISO standards, technology specific process / control methodologies, etc.
FFIEC Federal Financial Institutions Examination Council
Alignment With Technology Infrastructure

(Illustration Only)
External Risks
Vulnerability to Hackers
Internet
Internal Risks
Unauthorized Access by Internal Users (employees or contractors)
Distributed Systems UNIX & Windows
DMZ
Firewalls
Other Servers
Email FTP DNS
Databases & Applications
Subsidiaries
Router
Firewalls / Secure Routing
Router
3rd Parties
LANS
Mainframe Systems
Remote LANS
VPN
Remote Access
Router
Monitoring, Intrusion Detection & Anti-Virus Systems

Security Audit Universe

Identity Management Security Governance Security Monitoring Intrusion Detection Application Security Incident Response Remote Access Security Virus Prevention Physical Security Software Management Access Management & Compliance Distributed Security Mainframe Security
Audit Universe
Database Security
Network & Perimeter Security

Map Audit Universe To COBIT

High Level Objective (i.e. PO2)
tion a ustr Ill

October 5, 2004
y Onl
Applicable Objectives Noted With X

Slide 45
Audit Approach Overview

COBIT Manuals & Other Best Practice Material
Client Work Sessions
COBIT Control Assessment Questionnaire
Audit Planning Session

Audit Team
Audit Testing
Work Program
7
Exit Meeting
COBIT To Audit Mapping Template

4
Engagement Memo
4
Kick-Off Meeting
Reporting
QAR
Slide 46
October 5, 2004
Map Audit Plan To COBIT
High Level Objective (i.e. PO2) Detailed Level Objective (i.e. 2.1) Applicable Objectives Noted In This Column
Risk Category Noted In This Column
October 5, 2004
Slide 47
Using COBIT Framework To Tie It All Together

Engagement Memo COBIT Control Assessment Questionnaire Work Program
Audit Report
Use of a Framework ensures consistent coverage across audits and allows for trending the state of controls over time.
October 5, 2004
y Onl n atio tr Illus

COBIT Control Assessment Questionnaire

One Table For Each High-Level COBIT Objective Included In Scope
Questionnaire is used during joint work sessions held with clients to complete a joint risk assessment of the area under review.
Overall Maturity Rating for each High-Level Control Objective assigned based on results of joint assessments of each Detailed Control Objective.
XYZ Company Specific Control Objectives
One COBIT Control Objective Per Row

October 5, 2004
COBIT Maturity Rating (0-5) assigned based on Joint Assessment

Preplanned Assessment Questions
Clients Response & Assessment Results
Slide 49
COBIT Based Audit Report

Overall Conclusion Statements Supporting Overall Rating Concise Background & Scope Overall Rating Clients Target Goal Audit Metrics
QAR
Responsible Manager Provided Response
Control Weakness highlighting business impact Issue Priority (A, B, C)

Due Date
Client Provided Responses

Slide 50
Strategic Focal Point Table (one row for each high-level objective included in scope) Highlighting Key Performance Indicators (i.e., Metrics)
Detailed Control Objectives Included In Scope Listed
Summary Conclusions and Points Supporting Rating
Overall Rating For High-Level Control Objective
Control Focal Point Table (highlighting key controls)
Applicable Detailed Control Objective (one per row; corresponds to a row in the Assessment Questionnaire) Assigned Maturity Rating
Highlighting Key Performance Indicators (i.e., Metrics) Summary Conclusions and Points Supporting Rating
Slide 51

Process Workflow Diagram For Area Assessed
Table Defining Key Control Points In Process Flow
Highlighting Key Performance Indicators (i.e., Metrics)
i t ra t Illus
y Onl on
Automated or Manual Control
October 5, 2004
Slide 52
COBIT To Audit Mapping Repository

i t ra t Illus y Onl on
Questionnaire
Audit Report
Quarterly Report Of Audit Results (QAR)

Quarterly Audit Report

Audit Results Metrics
IAD Focal Point Methodology Scorecard
Overall Audit Results

Infrastructure Audits Infrastructure6) Audits (refer to slide
(refer to slide 6) 100% 25% 25%
Security Audits Security Audits (refer to slide 7)

(refer to slide 7)
OVERALL OVERALL
12%
12%
25%
90% 80% 60% 60% 60% Data Not Available For 2001
25%
Data Not Available For 2001
25%
17%
Q4 YTD
70% 60% 50% 40% 30%
40%
40%
20% 10% 0%
40%
20%
20%
Q1
Q2 Q3 2002
Q4
YTD
Prior Year
Q1
Q2 Q3 2002
Q4
YTD
Prior Year
Q1
Q2 Q3 2002
13%
Prior Year
Legend:
5 - Optimized 4 - Managed 3 - Defined 2 -Repeatable 1 - Initial 0 Non-Existent
Date Printed: 03/24/2003
Charles Schwab & Co, Inc.
Data Not Available For 2001
No Reports Issued
68%
TBD
TBD
68%
TBD 75%
75%
75%
75%
75%
70%
Analysis of Key Technology Metrics

Example of Metric Analysis To Include In QAR
(Illustration Only)
Although target rates have not been achieved, change management processes are successful on average 75% of the time. Less then 1% of appropriately recorded changes resulted in problems or outages
Target Rate 97%
(Source: Technology Management Balanced Scorecard)
100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%
Q1, 2002 Q2, 2002 Q3, 2002 YTD
Successful
Failed & Backed Out
Caused Problem
Caused Outage
Cancelled
Unstatused
2 5 .0 0 % 2 0 .0 0 % 1 5 .0 0 % 1 0 .0 0 % 5 .0 0 % 0 .0 0 %
Failed & Backed Out Caused Problem Caused Outage Cancelled Unstatused
i t ra t Illus
October 5, 2004
y Onl on
Internal Audit Observations:

# # #
Q1, Q2, 2002 2002
Q3, 2002
YTD
Change management processes appear to be consistently applied with only minor variances in volume. Large percentage (~20%) of unstatused tickets indicates process adherence issues. True results cannot accurately be determined; therefore, additional management scrutiny is appropriate for the unstatused items. Trend for tickets with implementation problems is increasing - additional analysis to ascertain root cause of the increase in this activity would be appropriate. Root cause may rest with testing and validation processes.
2003 North America CACS Conference Slide 77
May 20, 2003
Slide 54
Benefits Realized
# IT management partners with Internal Audit throughout the audit life cycle, including input into the audit schedule and scope. # IT management becomes conversant in risk, control, and audit concepts. # Relationships transformed into partnerships by jointly assessing control procedures. # Audit Report streamlinedconcise report supported by detailed questionnaire (i.e., Risk Self Assessment RSA). # Audit approach is methodical and is consistent with IT Governance practices implemented throughout the companys technology organization. # Meaningful reporting for senior IT management. Facilitated efforts to implement processes necessary for Sarbanes-Oxley compliance.
Additional Audit Resources
Templates (http://www.sfisaca.org/resources/downloads.htm)
COBIT Case Study (http://www.itgi.org/casestudy4.htm) (http://www.isaca.org/ctcase27.htm)
October 5, 2004
Slide 56
COBIT As A Risk Management Framework For Information Security
Case Study Information Security Access Compliance
Drivers of Information Security Requirements

Key To Success! Management Buy In
Awareness
(value of IT governance framework)
Business Drivers
Shorter business cycles Need to involve/connect/tie in with more partners Network centric business models Leverage VPN, remote access, new tools Regulatory Requirements
Perceived / Understood Risk Cost / Benefit Benchmarks Clarity of Purpose

October 5, 2004
Technology Drivers
Manage Risk
!Internet - UNIX - TCP/IP !More hackers, more tools !Increased dependency on IT
Leverage Opportunities
!E-cash, e-commerce, e-tc. !Open, modular, scalable !Security a commodity
Slide 58
Senior Management Awareness Tone From Top

Questions From Senior Management / Board
$ $
What does security cost? Have we completed a risk assessment in order to define where the enterprise is most vulnerable (i.e., where do we most appropriately focus our security resources)? How do we measure our state of security. How do we ensure that customer data (NPI) and sensitive financial information is appropriately safeguarded and only accessible by users with a business need to know or use the data? Do we know for certain how many people are accessing the organizations systems? Are we monitoring the access are resource owners appropriately engaged? What are the most critical information assets of the enterprise (do we have an inventory)? Has data been classified and secured based on relative risk? Do we maintain an inventory of all system devices that the company owns / leases? Would management know if some went missing? Would people recognize a security incident when they saw one? Would they ignore it? Would they know what to do about it? Has the organization ever had its security validated by a third party?
$ $
$ $
$ $
October 5, 2004
Cost of Information Security

Cost of Security / Control VERSUS IT Budget
Leadership
Best Practices Industry Leader
Benchmarking
Baseline Operation
Minimum Requirements Non-Compliance

Cowboy Operation
5 - 10%
= Drivers
October 5, 2004
20 - 25%
45 - 50%
55%
Slide 60
Monitoring Emerging Risk Indicators: Is Risk Well Managed?

Risk management is concerned (in part) with processes designed and sustained by management to reduce the risk of material error
# Frequent measurement of results is prerequisite for a sustained and controlled environment. # Standardization and design are prerequisite for repeatability. Risk Drivers Lessons Learned From COBIT?
(Risk decreases when processes are: Mature sustainable and measurable Repeatable and predictable Systematic / automated Monitored Standardized (designed / defined) Documented and communicated (Risk increases when processes are: Inconsistent Ad-hoc (not standardized) Not monitored Relying upon the knowledge of individuals (i.e., lack of documentation)
In line with COBITs Management Guidelines, access management should include formal steps for proactively evaluating compliance via monitoring activities and meaningful performance indicators (i.e., metrics)
Monitoring Emerging Risk Indicators: Ongoing Measurement / Ongoing Dialogue

Monitor key performance indicators (i.e. metrics) on an ongoing basis
Traditional Risk Assessment Approach
(Prioritization based on annual risk assessment of function)
Ongoing Monitoring Of Risk Indicators

(Gaining Efficiencies Through Focus On High Risk Indicators)
Control Environment
Control Environment
Expectation
Ongoing Measurement Expectation
Report
Report
Assess 2
Report
Assess 2 Reality
Asses 1
Assess 1
Reality
t1
t2
Time
t1
t2 Time
Challenges Of Point-In-Time Assessment Evaluation of risk and control is as of a point in time. Management reporting is reflective of results as of a point in time. Priorities may be influenced by prior results (i.e., focus on past areas of weakness). )Good or Bad?? If a risk assessment on the function has not been completed for a long time, there may be a learning curve.
October 5, 2004
Benefits of Ongoing Monitoring Quarterly readout of assessment results for technology management. Ongoing dialogue regarding areas of significant or increasing risk. Priorities more closely associated with known risk factors ultimately leading to more controlled risk mitigation and potential process improvements / efficiency gains.
Slide 62
Monitoring Emerging Risk Indicators: Overall Objective & Goal
Goal is to proactively monitor metrics on an ongoing basis to focus risk remediation efforts on high-risk processes and tasks where performance indicators indicate potential problems. Results of metric analysis is presented to senior management on a quarterly basis. The analysis indicates priorities for remediation efforts and any required changes to existing processes.
Information Security: Security Metrics Development Process
October 5, 2004
Slide 64
Information Security: Security Metrics Implementation Process
October 5, 2004
Slide 65
Information Security: Measuring Performance (illustration only)

Policy
Security Management Process Human Policy & Behaviour 2 Procedures 1 3 & Culture Network 6 Segregation
4 Application
Security
System Access Control
Tools & Technology

0 1 2 3 4 5 Very Very poor Poor Fair Good good Excel
100
10 10 20 20 20 20
1. Policies & Procedures 2. Security Management 3. Behavior & Culture 4. Application Security 5. System Access Control 6. Network Segregation
Legend for Symbols Used
Average of best security performers in the financial industry (begin 96) Company status Feb 97 Company objective for 2001
5 - Excellent: 4 - Very good: 3 - Good: 2 - Fair: 1 - Poor: 0 - Very poor: Legend for ranking used
80 60 40 20 0 48 42 64
88 76
92
96
Best possible, highly integrated Advanced level of practice Moderately good level of practice Some effort made to address issues Recognise the issues Complete lack of good practice
1996 1997 1998 1999 2000 2001

Slide 66
October 5, 2004
Information Security: Measuring Performance (illustration only)

The Security Officer consistently performs both internal and external vulnerability scans on a monthly basis. The majority of vulnerabilities identified are low risk
Internal Vulnerability Scans
1000 900 800 700 600 500 400 300 200 100 0 Q1, 2002 Q2, 2002 YTD
0 Q1, 2002 Q2, 2002 YTD 3000 2500
External Vulnerability Scans
Low Risk Vulnerabilities Medium Risk Vulnerabilities High Risk Vulnerabilities
2000 1500 1000 500
Low Risk Vulnerabilities Medium Risk Vulnerabilities High Risk Vulnerabilities
Observations:
#
A
Slight increase in high risk vulnerabilities
An increase in internal vulnerabilities occurred from Q1 to Q2. The increase is explained due to new system patches checked for by the vulnerability scanner that have not been applied to the XYZ company servers. Technology management appropriately applies patches only after the patches have been tested and certified. A decrease in external vulnerabilities was noted from Q1 to Q2. These results demonstrate that a significant number of Q1 vulnerabilities have been resolved.
2004 San Francisco ISACA Fall Conference Slide 67 B
October 5, 2004
Information Security: Key Indicators Access Compliance

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Access Administration Workflow (adds, changes, deletions, special requests) Access Administration Service Level Attainment (measured against target / goal) Percentage of ID requests submitted with appropriate approvals Inactive ID Remediation (percentage decline over time) Privileged Access Oversight (percentage of total IDs) Shared / Generic ID Oversight (percentage of total IDs) Percentage of current access administration policies / standards Percentage of current access administration guidelines Percentage of current access administration procedures Number of access related incidents reported Average time elapsed between incident discovery and implementation of corrective action Percentage of IDs for which supervisory review has been completed in the past quarter to validate that access remains appropriate for the users job function Percentage of systems for which access security parameters have been tested and evaluated in the past year & percentage of non-compliant systems Percentage of system resources without a defined / accountable resource owner assigned Percentage of systems that maintain logs (audit trail) to trace user activity Percentage / Number of access violations to critical system resources Percentage of passwords not in compliance with policy (password quality)
October 5, 2004
Tools To Facilitate Your Risk Management Efforts
COBIT Security Baseline
October 5, 2004
Slide 70
COBIT Security Baseline (continued)

Focusing attention on security-related objectives from the entire COBIT framework...
October 5, 2004
Slide 71
COBIT Security Baseline (continued)
October 5, 2004
Slide 72
IT Control Practice Statement COBIT - DS5 Ensure System Security

IT control practices expand the capabilities of COBIT by providing the practitioner with an additional level of detail. The current COBIT IT processes, business requirements and detailed control objectives define what needs to be done to implement an effective control structure. The IT control practices provide the more detailed how and why needed by management, service providers, end users and control professionals to implement highly specific controls based on an analysis of operational and IT risks.
IT Control Practice Statement COBIT - DS5 Ensure System Security (EXAMPLE)

DS 5.4 User Account Management Why do it?
The enforcement of adequate user account management in line with the control practices will help ensure: Proper administration of the lifecycle of user accounts Communication to and acknowledgment by users of the rules with which they need to comply
Control Practices
DS 5.4.01 Procedures are in place to ensure timely actions in relation to requesting, establishing, issuing, suspending and closing user accounts. All actions require formal approval. DS 5.4.02 When employees are given their account, they are provided with initial or refresher training and awareness on computer security issues. Users are asked to review a set of rules and regulations for system access. DS 5.4.03 Users use quality passwords as determined by the organization's password guidelines. Quality aspects of passwords include: enforcement of initial password change on first use, appropriate minimum password length, appropriate and enforced frequency of password changes, password checking against list of not-allowed values, e.g., dictionary checking and adequate protection of emergency passwords. DS 5.4.04 Third-party users are not provided with user codes or passwords unless they have signed a nondisclosure agreement. Third-party users are provided with the organization's security policy and related documents and must sign off that they understand their obligations. DS 5.4.05 All contracts for outsourcing or contracting address the need for the provider to comply with all security related policies, standards and procedures.
Additional Resources & Questions

Templates & Resources
(http://www.sfisaca.org/resources/downloads.htm)
COBIT Security Baseline IT Control Practice Statement COBIT DS5 Ensure System Security Questionnaire for IT Control Practice Statement DS5 Security Self-Assessment Guide for Information Technology Systems (National Institute of Standards & Technology) Security Metrics Guide for Information Technology Systems (National Institute of Standards & Technology) Access Compliance Scorecard Template ISO 17799 (http://www.iso-17799.com/) FFIEC Information Security Examination Handbook (http://www.ffiec.gov/ffiecinfobase/html_pages/it_01.html)
October 5, 2004
Slide 75
Questions?
Thank You!

Use COBIT Manage Access Compliance

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2004 San Francisco ISACA Fall Conference

Presented on October 5, 2004 by Lance M. Turcato, CISM, CISA, CPA

Lance M. Turcato, CISM, CISA, CPA

2004 San Francisco ISACA Fall Conference

Marta OShea, CISA

2004 San Francisco ISACA Fall Conference

Current Users of COBIT

2004 San Francisco ISACA Fall Conference

COBIT As An Audit Framework

COBIT As A Risk Framework For Information Security

2004 San Francisco ISACA Fall Conference

Overview of COBIT Framework

Source of Information IT Governance Institute (http://www.itgi.org/ )

COBITs Mission, Scope & Objectives

COBITs Role In IT Governance IT Governance Framework

Deliver Against Goals

Apply Consistent Control Framework

COBIT Family 3rd Edition

Heres How You Implement... The Method Is...

Heres How You Measure Your Performance

Minimum Controls Are...

Heres How You Audit...

2004 San Francisco ISACA Fall Conference

COBIT Pieces of The Puzzle

- Senior Executives (CEO, CIO)

Provides awareness on key concepts for Senior Management.

Statements of desired results by implementing 318 specific control objectives.

# Implementation Tool Set

- Director of IS and Audit/Control, Mid-Level IS

Suggested implementation tools and implementation success stories.

COBIT As An IT Control Framework

supported by a set of over 300 detailed control objectives

2004 San Francisco ISACA Fall Conference

COBIT Framework - Components

2004 San Francisco ISACA Fall Conference

People Application Systems Technology Facilities Data

COBIT Domains of Processes & Activities

2004 San Francisco ISACA Fall Conference

Business Requirements = Information Criteria

Business Requirements IT Processes IT Resources

2004 San Francisco ISACA Fall Conference

COBIT Framework - Examples

2004 San Francisco ISACA Fall Conference

COBIT Framework Illustrated

COBITs Golden Rule

2004 San Francisco ISACA Fall Conference

Linking The Processes To Control Objectives

COBITs Waterfall and Navigation Aids

Delivery & Support

Linking The Processes To Control Objectives

that satisfies the business requirement

and takes into consideration: #enterprise business strategy

COBIT IT Processes/High-Level Objectives

Planning and Organization

2004 San Francisco ISACA Fall Conference

COBIT IT Processes/High-Level Objectives

Acquisition and Implementation

2004 San Francisco ISACA Fall Conference

COBIT IT Processes/High-Level Objectives

COBIT IT Processes/High-Level Objectives

2004 San Francisco ISACA Fall Conference

Example Control Objectives For A Process