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E-FRAUD: THE DEVIL INSIDE

Source: TorontoInternet.com

Posted on April 1, 2001

      Executives from Canada's largest companies need to recognize the enemy within, according to a global e-fraud survey released today by KPMG LLP.

      Ninety-two percent of CEOs, CIOs and other senior management from public and private companies in the nation said that a breach in their e-commerce system would most likely be perpetrated through the Internet or other external access. Globally, the response rate was lower at seventy-nine percent.

      So too were ill-intentioned hackers, poor implementation of security policies and a lack of employee awareness seen as the greatest areas of threat to a company's e-commerce security.

      But while there's no denying the existence of external dangers, it is well documented that the greatest risk is from internal perpetrators. Disgruntled employees, pink slip-carrying former workers and external service providers - they all lay claim to a familiarity with a company's e-commerce system. And it is precisely this insider knowledge and know-how that could be used to cause irreparable damage.

      "Most security breaches are committed by individuals who possess intimate knowledge of the systems they are attacking," said Norman Inkster, president of KPMG Investigation and Security Inc. in Canada and chair of KPMG's international forensic accounting committee. "If senior management understood that, they might handle their security issues very differently."

      What's more, the survey also found that companies are failing to implement policies that could prevent and help prosecute e-commerce fraud. Only twenty-two percent of companies have computer forensic response guidelines.

      Forty-five percent of Canadian executives surveyed said that security audits are performed on their e-commerce systems, while globally the rate was less than 35 percent. Only half of the global respondents have incident response procedures in place for when they do discover a breach, with a similar rate in Canada.

      In fact, Inkster warns that in an event of a breach, companies are far too quick to get the system up-and-running again - a process that destroys evidence making the recovery of assets and the pursuit of legal action practically impossible.

      "It's like cleaning a crime scene before dusting for fingerprints," said Inkster.




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