Reading review problem. The growth of information technology has been a positive force in business; but, as with all innovations, it has a downside risk as well. Consider the following case of identity theft:
Federal prosecutors charged 11 men in five countries with orchestrating a high-tech operation that stole more than 40 million credit card numbers from U.S. retailers. The case is the biggest identity-fraud heist ever prosecuted in the U.S. The government said the defendants engaged in a sophisticated scheme involving wireless interception of retailers’ data transmissions, “sniffer” programs that stole card numbers as they were being swiped at cash registers, bulk fencing of stolen cards at less than $1 apiece on the Internet, and encrypted computer servers that stored the thieves’ digital plunder in Latvia and Ukraine. [One retailer] says it has set aside $202 million to cover costs including settlements with consumers and card-issuing banks. In a statement, the company said that the number of retailers attacked “demonstrates the much broader challenges in protecting sensitive consumer data from this increasing threat.”
As a future accounting professional, you may be called upon to help prevent, detect, or correct situations like that one in your career.
Source: J. Pereira, J. Levitz, and J. Singer-Vine, “U.S. Indicts 11 in Global Credit-Card Scheme,” The Wall Street Journal (Eastern Edition), August 6, 2008, p. A1.
a. Use Carter’s taxonomy for computer crime to classify the case.
b. What business risk(s)/threat(s) are exemplified by it?
c. Which element(s) of the C-I-A triad was/were compromised in the case?
d. What internal controls would you recommend to address the problem?
e. Discuss elements of the CoBIT framework that are relevant to this case.
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