1/14/2020 Cloud Computing Risk Assessment: A Case Study Cloud Computing Risk Assessment: A Case Study Sailesh Gadia, CISA, ACA, CPA, CIPP Article in Digital Form Download Article Cloud computing has come a long way from being a mere buzzword to a meaningful tool with a lot of potential for consumers of technology products and services. The adoption of cloud computing has accelerated in the last few years, and it continues to undergo phenomenal growth.1 Just as in the early days of the Internet, there are many unknown variables in cloud computing. Due to its nebulous nature, it is important to understand the risks associated with utilizing cloud computing. It is not just a new technology; it is a different way of doing business. Case Study Company A is a start-up that offers business software branded as BusinessExpress. Company A offers BusinessExpress as a Software as a Service (SaaS) solution. The demand for SaaS solutions is expected to grow rapidly. With SaaS, customers enjoy all the benefits of cloud solutions such as not having to host their software in-house2 (figure 1). Company A’s core competency is performing software development, not providing hosting solutions. Infrastructure as a Service (IaaS) cloud service providers (CSPs) specialize in providing hosting solutions. Leveraging an IaaS CSP for hosting has allowed Company A to remain focused on its core competency. There are several other benefits of utilizing an IaaS CSP, such as:3 The ability to offer the software solution on a variety of hardware platforms such as Windows, UNIX and Linux Rapid scalability Pay-as-you-go capabilities Resource availability Due to the numerous benefits of IaaS, Company A leapt into a cloud computing arrangement. The cloud’s economies of scale and ISACA HAS CHANGED PRIVACY ACCESS THEofREVISED NOTICE AND TERMS, CLICK HERE. BYcompany engaged an flexibility are both aITS friend and a NOTICE, foe from TO a security point view.4 The chief information officer (CIO) of the ACCEPT CONTINUING USE THE SITE, YOUtoAGREE TOa THE REVISED TERMS. informationTO systems (IS) auditor conduct review and assess the risks of offering a SaaS solution and adopting IaaS cloud computing for this arrangement. The following paragraphs describe the steps followed by the IS auditor to conduct the exercise. This exercise will help the CIO in GATHERING determining TOOLS what Company A needs to protect, the risks and determining a response. THIS WEBSITE USES INFORMATION INCLUDING COOKIES, AND prioritizing OTHER SIMILAR TECHNOLOGY. ACCEPT BY USING THIS WEBSITE, YOU CONSENT TO USE OF THESE TOOLS. IF YOU DO NOT CONSENT, DO NOT USE THIS WEBSITE. USE OF THIS WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 1/7 1/14/2020 Cloud Computing Risk Assessment: A Case Study To conduct a risk-based assessment of the cloud computing environment, there are generic risk frameworks such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management—Integrated Framework. There are also IT domain-specific risk frameworks, practices and process models such as ISO 27001 and IT Infrastructure Library (ITIL). Bottom-up guidance specific to cloud computing also exists from various bodies such as the Cloud Security Alliance (CSA), European Network and Information Security Agency (ENISA), and the US National Institute of Standards and Technology (NIST). The Cloud Controls Matrix released by CSA is designed to provide security principles to guide cloud vendors and assist prospective cloud clients in assessing overall security risks of a CSP. The NIST guidelines on security and privacy in public cloud computing (NIST Special Publication [SP] 800-144), which are currently in draft form, contain the guidelines required to address public cloud security and privacy. The Risk IT: Based on COBIT® framework from ISACA fills the gap between generic risk management frameworks and domain-specific frameworks based on the premise that IT risk is not purely a technical issue. The IS auditor of Company A chose the Risk IT framework, supplemented with an understanding of the Cloud Controls Matrix, ENISA’s cloud computing risk assessment and the NIST guidelines. Risk IT provides a list of 36 generic high-level risk scenarios, which can be adapted for each organization. Starting with the set of generic risk scenarios helps ensure that the IS auditor does not overlook risks and attains a more comprehensive view of IT risk. Further, Risk IT offers an extensive mapping between the generic risk scenarios and the COBIT control objectives that are customizable for each situation. Figure 2 illustrates the mapping between the high-level risk scenarios and the corresponding COBIT control objectives created by the IS auditor for the cloud computing arrangement. Leveraging Risk IT in conjunction with a widely accepted IT governance and controls framework such as COBIT makes the risk identification robust and the risk assessment process effective and efficient. This leads to a model that is extensible and reusable and that can scale up to IT risks affecting the entire company. Once the risks and COBIT control objectives were defined, they were used by the IS auditor to develop a risk-based audit program. Figures 3–105 represent a selection of the audit program for the higher-risk areas in figure 2. Figure 11 represents a summary of the specific risks and gaps after conducting the audit. ISACA HAS CHANGED ITS PRIVACY NOTICE, TO ACCESS THE REVISED NOTICE AND TERMS, CLICK HERE. BY CONTINUING TO USE THE SITE, YOU AGREE TO THE REVISED TERMS. ACCEPT THIS WEBSITE USES INFORMATION GATHERING TOOLS INCLUDING COOKIES, AND OTHER SIMILAR TECHNOLOGY. BY USING THIS WEBSITE, YOU CONSENT TO USE OF THESE TOOLS. IF YOU DO NOT CONSENT, DO NOT USE THIS WEBSITE. USE OF THIS WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. ACCEPT https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 2/7 1/14/2020 Cloud Computing Risk Assessment: A Case Study ISACA HAS CHANGED ITS PRIVACY NOTICE, TO ACCESS THE REVISED NOTICE AND TERMS, CLICK HERE. BY CONTINUING TO USE THE SITE, YOU AGREE TO THE REVISED TERMS. ACCEPT THIS WEBSITE USES INFORMATION GATHERING TOOLS INCLUDING COOKIES, AND OTHER SIMILAR TECHNOLOGY. BY USING THIS WEBSITE, YOU CONSENT TO USE OF THESE TOOLS. IF YOU DO NOT CONSENT, DO NOT USE THIS WEBSITE. USE OF THIS WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. ACCEPT https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 3/7 1/14/2020 Cloud Computing Risk Assessment: A Case Study ISACA HAS CHANGED ITS PRIVACY NOTICE, TO ACCESS THE REVISED NOTICE AND TERMS, CLICK HERE. BY CONTINUING TO USE THE SITE, YOU AGREE TO THE REVISED TERMS. ACCEPT THIS WEBSITE USES INFORMATION GATHERING TOOLS INCLUDING COOKIES, AND OTHER SIMILAR TECHNOLOGY. BY USING THIS WEBSITE, YOU CONSENT TO USE OF THESE TOOLS. IF YOU DO NOT CONSENT, DO NOT USE THIS WEBSITE. USE OF THIS WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. ACCEPT https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 4/7 1/14/2020 Cloud Computing Risk Assessment: A Case Study The auditor created a heat map of risks (figure 12) that shows the impact/magnitude and likelihood/frequency of key risks relevant to Company A. The combination of higher (negative) impact/magnitude and higher likelihood/frequency of the incident leads to a higher level of business risk. The darker shade indicates unacceptable risk. This level of risk is far beyond Company A’s normal risk appetite. (There may be other risks unique to the ultimate end users/customers of Company A, but that is out of scope for this case study.) Due to competing resources, the prioritization of risks related to cloud computing needs to occur, and appropriate action should be taken based on the risk appetite of the company. Appropriate action includes a combination of the following: Implement controls. Transfer risk(s). Avoid risk(s). Accept risk(s). The audit highlighted that Company A needs to mitigate several risks. However, implementing too many controls may not be the ISACA CHANGED ITS PRIVACY NOTICE, ACCESS REVISED NOTICE TERMS, CLICK BY risk-mitigation bestHAS risk-mitigation approach because theTO benefit fromTHE implementing controlsAND should outweigh theHERE. cost. Other ACCEPT CONTINUING TO USE THE SITE, YOU AGREE TO THE REVISED TERMS. measures such as transferring, avoiding or accepting the risk are worth considering as well. Once the company aligns IT risk with the organization’s overall business risk AND and remediates unacceptable security controls, the THIS WEBSITE USES INFORMATION GATHERING TOOLS INCLUDING COOKIES, OTHER SIMILAR TECHNOLOGY. ACCEPT BY USING THIS WEBSITE, YOU CONSENT OF of THESE IF YOU DO NOT CONSENT, DO NOT USE THIS company is better prepared to harnessTO theUSE power cloudTOOLS. computing. WEBSITE. USE OF THIS WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 5/7 1/14/2020 Cloud Computing Risk Assessment: A Case Study Conclusion Businesses are realizing the power of cloud computing, and its use is increasing. This case study represents a one-time attempt at risk assessment of the cloud computing arrangement. The risk assessment helped uncover some of the key risks, prioritize those risks and formulate a plan of action. Given the evolving nature of risks in cloud computing, no longer can one-time risk assessments suffice. As newer risks emerge, risk assessments need to evolve and the mitigation approach needs to innovate. A risk assessment needs to occur before an enterprise enters into a cloud computing arrangement—to help avoid surprises and minimize the costs of implementing and maintaining controls. References American Institute of Certified Public Accountants (AICPA), Service Organization Control (SOC) reports, www.aicpa.org/interestareas/accountingandauditing/resources/soc/pages/sorhome.aspx Cloud Security Alliance, “Security Guidance for Critical Areas of Focus in Cloud Computing V2.1,” December 2009, USA, https://cloudsecurityalliance.org/csaguide.pdf International Organization for Standardization (ISO), ISO/IEC 27001:2005, Information technology—Security techniques— Information security management systems—Requirements, Switzerland, 2005, www.iso.org/iso/catalogue_detail? csnumber=42103 International Federation of Accountants (IFAC), International Standard on Assurance Engagements (ISAE) 3402, Assurance Reports on Controls at a Service Organization, http://web.ifac.org/download/b014-2010-iaasb-handbook-isae3402.pdf ITGI, IT Assurance Guide: Using COBIT, USA, 2007 Office of Government Commerce, IT Infrastructure Library, UK, www.itil-officialsite.com Jansen, Wayne; Timothy Grance; National Institute of Standards and Technology (NIST) Draft Special Publication (SP) 800-144, Guidelines on Security and Privacy in Public Cloud Computing, NIST, USA, 2011, http://csrc.nist.gov/publications/drafts/800-144/Draft-SP-800-144_cloudcomputing.pdf Endnotes 1 Gartner Inc., “Gartner Says Worldwide Cloud Services Market to Surpass $68 Billion in 2010,” press release, 22 June 2010, www.gartner.com/it/page.jsp?id=1389313 2 Gadia, Sailesh; “Cloud Computing: An Auditor’s Perspective,” ISACA Journal, vol. 6, 2009, www.isaca.org/Journal/PastIssues/2009/Volume-6/Pages/Cloud-Computing-An-Auditor-s-Perspective1.aspx 3 Pepitone, Julianne; “Why Attackers Can’t Take Down Amazon.com,” CNNMoney.com, 9 December 2010, http://money.cnn.com/2010/12/09/technology/amazon_wikileaks_attack/index.htm 4 European Network and Information Security Agency (ENISA), Cloud Computing: Benefits, Risks and Recommendations for Information Security, Greece, 2009, www.enisa.europa.eu/act/rm/files/deliverables/cloudcomputing-risk-assessment 5 IT Governance Institute (ITGI), COBIT® 4.1, USA, 2007 Sailesh Gadia, CISA, ACA, CPA, CIPP is a director/senior manager at KPMG’s advisory practice in Minneapolis, Minnesota, USA. He has an extensive background in designing, implementing and assessing IT controls in various industries and third-party service organizations. Gadia is also an editorial advisor for the monthly Journal of Accountancy from the American Institute of Certified Public Accountants (AICPA). His previous ISACA Journal article on cloud computing was published in vol. 6, 2009. Gadia can be reached at sgadia@kpmg.com. Enjoying this article? To read the most current ISACA Journal articles, become a member or subscribe to the Journal. The ISACA Journal is published by ISACA. Membership in the association, a voluntary organization serving IT governance professionals, entitles one to receive an annual subscription to the ISACA Journal. Opinions expressed in the ISACA Journal represent the views of the authors and advertisers. They may differ from policies and official statements of ISACA and/or the IT Governance Institute® and their committees, and from opinions endorsed by authors’ employers, or the editors of this Journal. ISACA Journal does not attest to the originality of authors’ content. © 2011 ISACA. All rights reserved. Instructors are permitted to photocopy isolated articles for noncommercial classroom use without fee. For other copying, reprint or republication, permission must be obtained in writing from the association. Where necessary, permission is granted by the ISACA HAS CHANGED ITS PRIVACY NOTICE, TO ACCESS THE REVISED NOTICE AND TERMS, CLICK HERE. BY ACCEPT copyright owners those registered withTO theTHE Copyright Clearance CONTINUING TO USEfor THE SITE, YOU AGREE REVISED TERMS. Center (CCC), 27 Congress St., Salem, MA 01970, to photocopy articles owned by ISACA, for a flat fee of US $2.50 per article plus 25¢ per page. Send payment to the CCC stating the ISSN (1526-7407), date, volume, and first and last page number of each article. Copying for other than personal use or internal THIS WEBSITE USES INFORMATION GATHERING TOOLS INCLUDING COOKIES, AND OTHER SIMILAR TECHNOLOGY. reference, of articlesYOU or columns notTO owned association of the association ACCEPT BY USING THISorWEBSITE, CONSENT USE by OFthe THESE TOOLS.without IF YOU express DO NOT permission CONSENT, DO NOT USE THIS or the copyright owner is expressly WEBSITE. USE OF THISprohibited. WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 6/7 1/14/2020 Cloud Computing Risk Assessment: A Case Study good Posted by BIKASH702 on 10 Aug 2011 i will work with, thanks Posted by Robert759 on 11 Aug 2011 This is an useful document and well written. Posted by Raktim794 on 04 May 2015 ISACA HAS CHANGED ITS PRIVACY NOTICE, TO ACCESS THE REVISED NOTICE AND TERMS, CLICK HERE. BY CONTINUING TO USE THE SITE, YOU AGREE TO THE REVISED TERMS. ACCEPT THIS WEBSITE USES INFORMATION GATHERING TOOLS INCLUDING COOKIES, AND OTHER SIMILAR TECHNOLOGY. BY USING THIS WEBSITE, YOU CONSENT TO USE OF THESE TOOLS. IF YOU DO NOT CONSENT, DO NOT USE THIS WEBSITE. USE OF THIS WEBSITE IS NOT REQUIRED BY ISACA. OUR AD AND COOKIE POLICY IS LOCATED HERE. ACCEPT https://www.isaca.org/Journal/archives/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx 7/7 558W4 Case Study 1 - Mitigating Cloud Computing Risks Case Study 1: Mitigating Cloud Computing Risks Worth 125 points Imagine you are an Information Security Manager in a medium-sized organization. Your CIO has asked you to prepare a case analysis report and presentation on establishing internal controls in cloud computing. The CIO has seen several resources online which discuss the security risks related to Cloud based computing and storage. One that stood out was located at http://www.isaca.org/Journal/PastIssues/2011/Volume-4/Pages/Cloud-Computing-Risk-Assessment-A-Case-Study.aspx. You are being asked to summarize the information you can find on the Internet and other sources that are available. Moving forward, the CIO wants to have a firm grasp of the benefits and risks associated with public, private, and hybrid cloud usage. There is also concern over how these systems, if they were in place, should be monitored to ensure not only proper usage, but also that none of these systems or their data have been compromised. Write a three to four (3-4) page paper in which you: 1. Provide a summary analysis of the most recent research that is available in this area. 2. Examine the risks and vulnerabilities associated with public clouds, private clouds, and hybrids. Include primary examples applicable from the case studies you previously reviewed. 3. Suggest key controls that organizations could implement to mitigate these risks and vulnerabilities. 4. Develop a list of IT audit tasks that address a cloud computing environment based on the results from the analysis of the case studies, the risks and vulnerabilities, and the mitigation controls. 5. Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources. Your assignment must follow these formatting requirements: • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: • Describe the process of performing effective information technology audits and general controls. • Describe the various general controls and audit approaches for software and architecture to include operating systems, telecommunication networks, cloud computing, service-oriented architecture and virtualization. • Use technology and information resources to research issues in information technology audit and control. • Write clearly and concisely about topics related to information technology audit and control using proper writing mechanics and technical style conventions Click here to view the grading rubric for the case study.
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