IT Service Delivery and Support

Overview
IT Auditing and Cyber Security
Spring 2014
Instructor: Liang Yao (MBA, MS, CIA, CISA, CISSP)

1
 IT Service Delivery and Support

 Introduction
 Goals and Objectives
 Expectations
 IT Service and Delivery Overview

2
 Goals and Objectives

 Understanding the Roles and Responsibilities of IT

Operations within Organizations
 Understanding Risks and Controls Related to IT Service
and Delivery
 Understanding How to Evaluate and Test the Controls
Related to IT Operations
 Passing CISA Examination
 Seeking Job Opportunities in IT Auditing Field

3
 Expectations

 Attend the Class and Join the Discussion

 Ask Questions – there are no dumb questions
 Do Your Homework and Assignment
 Read the CISA Review Manual (Chapter Four) and
Textbook
 Don’t Miss the Final Examination

4
IT Service Delivery and Support

Course Syllabus

5
 Related ISACA Curriculum Topics

 Information Systems Review

 Maintenance of Information Systems
 Information Security
 Data Administration Practices
 Capacity and Performance Monitoring
 Problem and Incident Management
 Change, Configuration and Release Management
 End-User Procedures and Operations
 Backup and Restoration of Systems
 Service Level Management Practices
 Third-Party Management Practices

6
 Fundamentals of IT Audit

 IT Audit Objectives
 IT Audit Requirements
 IT responsibilities within the Organization
 Manage Risks in an Automated Environment
 Mitigate Security Risks
 Addressing Risks via Internal Controls
 Definition of Internal Control
 Audit Risk

7
 IT Audit Objectives

 Provide complete coverage of the organization’s or

business unit’s risks associated with technologies
 Provide management with a complete opinion on the
control environment and how it impacts risk and audit
coverage
 Include all aspects of audit, both automated and
manual procedures

8
 Requirements

 Knowledge of the industry, the organization, and

the technology in use
 Commitment from senior management
 Commitment from audit client management
 Commitment from audit management
 Training
 Appropriate resources, staffing and planning
(possible on loan from IT units for specific
expertise)
9
 IT Responsibilities within Organizations

 IT is the backbone of organizations day-to-day operations

 Information Sharing
 Data Repository
 Internal and External Communication
 Transaction Processing
 Organizations rely up IT as the primary control points for
business activities:
 Confidentiality
 Integrity
 Availability
 Accountability
 MIS Reporting - Basis of business decisions
10
 IT Risks and Controls

 What are risks associated with technologies?

 Identifying Risks
 Identifying Control Gaps
 Mitigating risks via internal controls
 Control Testing
 Design of Controls
 Operating Effectiveness of Controls

11
 Risks Examples

 Inadequate protection of assets (both physical and information)

 Interruption of the business activities and cycles
 Loss of revenue
 Loss of productivity
 Loss of privacy, confidentiality
 Loss of competitive edge
 Lack of data integrity
 Loss of company reputation
 Non compliance of regulation or legal requirements
 Inaccurate reporting
 No audit trails
 Business decisions made based on incorrect/inaccurate information – the sin
of all sins

12
 Mitigate Security Risks

 You can NOT eliminate risks!!!

 70% of IT risks are related to security risks
 Physical security – absence of the following, - security policy, fire alarm,
fire extinguisher (including the expired ones), sign in and sign out control,
raise floor in the data center, environment control, power balance,
auxiliary power unit (APU - generator), emergency power unit (batteries),
locations of primary and secondary data center, data media, location of
media storage and its policy
 Logical security – Security policy, access and its privileges to application
programs, procedure to enter information, distribution of paper and electronic
output, periodic review/monitor by management, application platforms and its
OS, outdated or non-supported platforms and technologies selected and used
 Policies – Password, create, approve, and remove of a user, logon process,
idle/inactive users, generic system users,

13
 Internal Control Definition

The COSO study provided a uniform definition of control for an organization:

Internal control is a process, affected by an entity’s board of directors,

management, and other personnel, designed to provide reasonable
assurance regarding the achievement of objectives in the following
categories:

 Effectiveness and efficient of operations

 Reliability of financial reporting
 Compliance with applicable laws and regulations
 Safeguarding asset

14
 Internal Control Definition

 It’s a process at a point in time

 Effected by people – not just policies and procedures – at all
levels of organization
 Provides reasonable assurance, not absolute assurance
 Geared to achievement of objectives in one or more of the four
COSO categories.
 Influenced by the “commitment at the top”

15
 IT Service Delivery and Support
Frameworks

 COSO: The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is

a joint initiative of five private sector organizations, established in the United States,
dedicated to providing thought leadership to executive management and governance
entities on critical aspects of organizational governance, business ethics, internal control,
enterprise risk management, fraud, and financial reporting.

 CoBit: an IT governance and control framework that focus on what should be addressed to
ensure good governance of all IT-related processes
(*CoBit 5 is available on ISACA’s website.)

 Information Technology Infrastructure Library (ITIL): provides best practices describing

how to plan, design and implement effective service management capabilities.

16
COSO Components of Internal
Control

17
 IT Service Delivery and Support
Elements – By ITIL
Service support : Service support describes the day-to-day operation and
support of IT services. It includes the service desk function as well as the
following five processes:

Service desk – The service desk function is the single point of contact
between users and IT service management. Tasks include handling
incidents and requests, and providing an interface for other ITSM
processes.
Incident management – Incident management's goal is to restore service
operation as quickly as possible with minimal disruption to users.
Problem management – Problem management is a process designed to
minimize the adverse effects of incidents and problems caused by
infrastructure errors. It also seeks to proactively prevent the recurrence
of these incidents and problems.

18
 IT Service Delivery and Support
Elements – By ITIL
Configuration management – Configuration management is a
process of identifying and defining configuration items within a
system. It also involves monitoring the status of these items,
processing requests for change, and verifying the completeness
and correctness of configuration items.
Change management – Change management is a process of
controlling changes within IT services or systems, with proper
approval and minimal disruptions.
Release management – Release management is the process of
introducing new or changed configuration items to the
infrastructure. These configuration items have been approved by
change management, tested, and determined to be ready for
implementation.
19
 IT Service Delivery and Support
Elements – By ITIL
Service delivery: Service delivery describes the long-term planning
and improvement of IT service provision. It addresses the following
five processes:

 Service level management – Service level management negotiates

and agrees to service requirements as defined by the customer
and agreed to by IT within the service level agreement. Then it
monitors, measures, and reports on the achieved service levels.
 Financial management for IT services – This is a process
concerned with cost awareness; more specifically the
identification, allocation, forecasting, and monitoring of costs
associated with IT services.

20
 IT Service Delivery and Support
Elements – By ITIL
 Capacity management – ensures the projected business
needs will be met in a cost-effective and timely manner. It
also ensures the infrastructure can handle new technology.
Capacity entails storage, facilities, networking capabilities,
and people.
 IT service continuity management – ensures that the proper
and required IT technical and service facilities can be
recovered in the agreed upon and required time frame
following a disruption to the business.
 Availability management – ensures services are available
when and at the level the customer requires them, as
defined by the service level agreement.
21
 CoBit Framework

The COBit framework is based on domains, processes,

activities and tasks. CoBit focused on the standards,
and procedures of the IT organization. The four
domains are:
 Plan and Organize
 Acquire and Implement
 Deliver and Support
 Monitor and Evaluate

22
 CoBit Framework (continued)

Seven Qualities of Information

 Effectiveness
 Efficiency
 Confidentiality
 Integrity
 Availability
 Compliance
 Reliability

23
 Delivery and Support Domain

DS1 Define and Manage Service levels

DS2 Manage Third-Party Services
DS3 Manage Performance and Capacity
DS4 Ensure Continuous Service
DS5 Ensure Systems Security
DS6 Identify and Allocate Costs
DS7 Educate and Train Users
DS8 Assist and Advise Customers
DS9 Manage the Configuration
DS10 Manage Problem and Incidents
DS11 Manage Data
DS12 Manage Facilities
DS13 Manage Operations
24
CoBit Framework (continued)

25
CoBit 5 New and Modified Process

There are several new and modified processes that reflect current
thinking, in particular:

APO03 Manage enterprise architecture

APO04 Manage innovation
APO05 Manage portfolio
APO06 Manage budget and costs
APO08 Manage relationships
APO13 Manage security
BAI05 Manage organisational change enablement
BAI08 Manage knowledge
BAI09 Manage assets
DSS05 Manage security service
DSS06 Manage business process controls

26
 Audit Risk

Audit risk “refers to the risk that an auditor may issue unqualified report due to auditors
failure to detect material misstatement either due to error or fraud.” (source: wikipedia)

Audit Risk is something keeping you up at night as an auditor

When the controls are adequate and reliable, there may be less need to look at the
details of transactions

Therefore, the auditor can take an approach that allows some reviews or test of
controls, also called compliance or functional tests, reducing the need for detailed
(substantive) tests. This decision is based on risk analysis; control of high-risk
transactions or events need to be reviewed first. Controls of low-risk transactions or
events can be evaluated as time permit.

27
 Audit Risk (continued)

However, when the controls do not appear to exist, or do

not function as intended, then auditors need to look much
more deeply into the details of balance, doing additional
substantive testing of that information.

Additionally the auditor needs to recommend that the

missing control is create or the defective control is replaced.

28
Auditing IT Infrastructure and Operations

 Risks Types
 Inherent Risk
 Mitigate Risk/Residual Risk
 Controls Types
 Preventive Controls
 Detective Controls
 Deterrent Controls
 System Controls vs. Application Controls
 Manual Controls vs. Automated Controls

29
 Risk Types

 Inherent Risk – is something you can not change.

Controls can be designed to mitigate the risks.
 Control Risk – is the risk that the controls do not in
fact do the job they were intended to do.
 Detection Risk – is the risk that the controls will
not detect errors or deliberate abuse.
 Audit Risk – is the combination of all these to
express the confidence that the audit will come a
conclusion that is in fact correct.

30
Risk Assessment – Likelihood and Impact

 Likelihood
 Impact Likelihood

Impact

31
 IS Operations Review

 CISA Review Manual Exhibit 4.26 – IS Operations Review

 Key areas to focus:
 Adequate instructions for running programs including emergency
procedure
 Training, peer reviews and performance records
 Up-to-date standard operation procedures
 Preventive Maintenance Schedule
 Tape Backup and offsite procedure
 Problem management procedures
 Separation of duties – programmers, operators and database
administrators
 Security!!!

32
 Review and Discussion

1. What are some current system-related risks that

you have experienced in your organization?
2. How does the control environment affect IT?
3. What is the purpose of all auditors having some
understanding of technology?

33