CHAPTER ONE

INTRODUCTION

1.0     Introduction

As the number of organizations that conduct their businesses electronically grows continuously, information protection becomes one of major concerns for top them. According to a recent survey by Forrester, out of 410 IT decision makers, about 75 percent reported that IT security has become critical to their business planning and over 80 percent reported that they are concerned about financial losses from it [20]. In another survey taken from risk managers of the U.S and European companies,

computer risk was ranked as the top concern among European companies and the number two concern among U.S. companies [14].

Information system or data asset protection incidents are also continuously rising. According to the 2005 computer crime and security survey by CSI/FBI, 95 percent of respondents reported that their organization experienced more than 10 Web cite incidents in 2005 compared to only 5 percent of respondents in 2004 [11,12]. The same survey also reported that the average loss per incident from the unauthorized access to information has increased to $300K from 51K and loss from the virus attack data asset has also increased to $356K from $169K since 2004. Thus, a data asset attack incident could result in tremendous financial losses to organizations [8, 22].

Employing an event study methodology, a few previous studies have investigated the market reaction of data asset protection announced publicly [5, 6, 9, 10, 14, 15]. The event study methodology is based on the assumption that capital markets are efficient to evaluate the impact of the events on expected future cash flows of the organization [7]. Overall, these previous studies found that the market discriminates affected companies in the first few days following the public announcement of the virus attack. However, no previous studies have investigated the impact of virus attack on long-term financial implication.

This study investigates the financial implication of virus attack on data asset.

1.1     Theoretical background

Virus has traditionally been spread via downloaded files, email and computer devices most especially storage devices. Expectations are that virus attack will become more common in the future with predictions that a single attack could result in billions of naira in damages alone in 2020. Nowadays, perpetrators of the external attacks (outsiders) can also use Malware to open external network ports to allow systems’ penetration or to perform a remote coordinated denial of service attack.

Denial of service attacks merely attempt to deny legitimate users access to resources by overwhelming a network or system (LabMice.net 2003). This is often achieved through the development of specific computer programs that seek to mount simultaneous attacks on organizational websites, networks or email servers. The content of the attack in itself is not harmful to the target (website, network or email server); however it is the volume of traffic directed at the target that results in slowing of system traffic or total system failure.

Systems penetration by an outsider occurs when a person, external to an organization, gains access to the organization’s computer system through the Internet (or other network system such as a wireless network access point). Once entry to the system is gained, the external attacker is often able to access corporate information.

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