Special Publications page
Table of Contents for
Special Publication 800-12:
Introduction & Overview
Table of Contents
Roles & Responsibilities
A Brief Overview
Computer Security Policy
Security & Planning in
the Computer Security
Personnel / User Issues
Preparing for Contingencies
Security Considerations in
Logical Access Control
Assessing and Mitigating
the Risks to a Hypothetical
a printable copy of Chapter 7.
Note: If you click any of the 2 images presented in this chapter, it will display a larger and better image quality at regular size. We shrunk the images on these pages to half its scanned size so it would fit on web page better.
Both government and industry routinely manage a myriad of risks. For example, to maximize the return on their investments, businesses must often decide between aggressive (but high-risk) and slow-growth (but more secure) investment plans. These decisions require analysis of risk, relative to potential benefits, consideration of alternatives, and, finally, implementation of what management determines to be the best course of action.
While there are many models and methods for risk management, there are several basic activities and processes that should be performed. In discussing risk management, it is important to recognize its basic, most fundamental assumption: computers cannot ever be fully secured. There is always risk, whether it is from a trusted employee who defrauds the system or a fire that destroys critical resources. Risk management is made up of two primary and one underlying activities; risk assessment and risk mitigation are the primary activities and uncertainty analysis is the underlying one.
7.1 Risk Assessment
Risk assessment, the process of analyzing and interpreting risk, is comprised of three basic activities: (1) determining the assessment's scope and methodology; (2) collecting and analyzing data; and (3) interpreting the risk analysis results.62
7.1.1 Determining the Assessment's Scope and Methodology
The first step in assessing risk is to identify the system under consideration, the part of the system that will be analyzed, and the analytical method including its level of detail and formality.
The Assessment may be focused on certain areas where either the degree of risk is unknown or is known to be high. Different parts of a system may be analyzed in greater or lesser detail. Defining the scope and boundary can help ensure a cost-effective assessment. Factors that influence scope include what phase of the life cycle a system in: more detail might be appropriate for a new system being developed than for an existing system undergoing an upgrade. Another factor is the relative importance of the system under examination: the more essential the system, the more thorough the risk analysis should be. A third factor may be the magnitude and types of changes the system has undergone since the last risk analysis. The addition of new interfaces would warrant a different scope than would installing a new operation system.
Methodologies can be formal or informal, detailed or simplified, high or low level, quantitative(computationally based) or qualitative (based on descriptions or rankings), or a combination or these. No single method is best for all users and all environments.
How the boundary, scope, and methodology are defined will have major consequences in terms of (1) the total amount of effort spent on risk management and (2) the type and usefulness of the assessment's results. The boundary and scope should be selected in a way that will produce an outcome that is clear, specific, and useful to the system and environment under scrutiny.
7.1.2 Collecting and Analyzing Data
Risk has many different components: assets, threats, vulnerabilities, safeguards, consequences, and likelihood. This examination normally includes gathering data about the threatened area and synthesizing and analyzing the information to make it useful.
Because it is possible to collect much more information than can be analyzed, steps need to be taken to limit information gathering and analysis. This process is called screening. A risk management effort should focus on those areas that result in the greatest consequence to the organization (i.e., can cause the most harm). This can be done by ranking threats and assets.
A risk management methodology does not necessarily need to analyze each of the components of risk separately. For example, assets/consequences or threats/likelihoods may be analyzed together.
Asset Valuation. These include the information, software, personnel, hardware, and physical assets (such as the computer facility). The value of an asset consists of its intrinsic value and the near-term impacts and long-term consequences of its compromise.
Consequence Assessment. The consequence assessment estimates the degree of harm or loss that could occur. Consequences refers to the overall, aggregate harm that occurs, not just to the near-term or immediate impacts. While such impacts often result in disclosure, modification, destruction, or denial of service, consequences are the more significant long-term effects, such as lost business, failure to perform the system's mission, loss of reputation, violation of privacy, injury, or loss of life. The more severe the consequences of a threat, the greater the risk to the system (and, therefore, the organization).
Threat Identification. A threat is an entity or event with the potential to harm the system. Typical threats are errors, fraud, disgruntled employees, fires, water damage, hackers, and viruses. Threats should be identified and analyzed to determine the likelihood of their occurrence and their potential to harm assets.
In addition to looking at "big-ticket" threats, the risk analysis should investigate areas that are poorly understood, new, or undocumented. If a facility has a well-tested physical access control system, less effort to identify threats may be warranted for it than for unclear, untested software backup procedures.
The risk analysis should concentrate on those threats most likely to occur and affect important assets. In some cases, determining which threats are realistic is not possible until after the threat analysis is begun. Chapter 4 provides additional discussion of today's most prevalent threats.
Safeguard Analysis. A safeguard is any action, device, procedure, technique, or other measure that reduces a system's vulnerability to a threat. Safeguard analysis should include an examination of the effectiveness of the existing security measures. It can also identify new safeguards that could be implemented in the system; however, this is normally performed later in the risk management process.
Vulnerability Analysis. A vulnerability is a condition or weakness in (or absence of) security procedures, technical controls, physical controls, or other controls that could be exploited by a threat. Vulnerabilities are often analyzed in terms of missing safeguards. Vulnerabilities contribute to risk because they may "allow" a threat to harm the system.
The interrelationship of vulnerabilities, threats, and assets is critical to the analysis of risk. Some of these interrelationships are pictured in Figure 7.1. However, there are other interrelationships such as the presence of a vulnerability inducing a threat. (For example, a normally honest employee might be tempted to alter data when the employee sees that a terminal has been left logged on.)
Likelihood Assessment. Likelihood is an estimation of the frequency or chance of a threat happening. A likelihood assessment considers the presence, tenacity, and strengths of threats as well as the effectiveness of safeguards (or presence of vulnerabilities). In general, historical information about many threats is weak, particularly with regard to human threats; thus, experience in this area is important. Some threat data -- especially on physical threats such as fires or floods -- is stronger. Care needs to be taken in using any statistical threat data; the source of the data or the analysis may be inaccurate or incomplete. In general, the greater the likelihood of a threat occurring, the greater the risk.
7.1.3 Interpreting Risk Analysis Results63
The risk assessment is used to support two related functions: the acceptance of risk and the selection of cost-effective controls. To accomplish these functions, the risk assessment must produce a meaningful output that reflects what is truly important to the organization. Limiting the risk interpretation activity to the most significant risks is another way that the risk management process can be focused to reduce the overall effort while still yielding useful results.
If risks are interpreted consistently across an organization, the results can be used to prioritize systems to be secured.
7.2 Risk Mitigation
Risk mitigation involves the selection and implementation of security controls to reduce risk to a level acceptable to management, within applicable constraints. Although there is flexibility in how risk assessment is conducted, the sequence of identifying boundaries, analyzing input, and producing an output is quite natural. The process of risk mitigation has greater flexibility, and the sequence will differ more, depending on organizational culture and the purpose of the risk management activity. Although these activities are discussed in a specific sequence, they need not be performed in that sequence. In particular, the selection of safeguards and risk acceptance testing are likely to be performed simultaneously.64
7.2.1 Selecting Safeguards
A primary function of computer security risk management is the identification of appropriate controls. In designing (or reviewing) the security of a system, it may be obvious that some controls should be added(e.g., because they are required by law or because they are clearly cost-effective). It may also be just as obvious that other controls may be too expensive (considering both monetary and nonmonetary factors). For example, it may be immediately apparent to a manager that closing and locking the door to a particular room that contains local area network equipment is a needed control, while posting a guard at the door would be too expensive and not user-friendly.
In every assessment of risk, there will be many areas for which it will not be obvious what kind of controls are appropriate. Even considering only monetary issues, such as whether a control would cost more than the loss it is supposed to prevent, the selection of controls is not simple. However, in selecting appropriate controls, managers need to consider many factors, including:
One method of selecting safeguards uses a "what if" analysis. With this method, the effect of adding various safeguards (and, therefore, reducing vulnerabilities) is tested to see what difference each makes with regard to cost, effectiveness, and other relevant factors, such as those listed above. Trade-offs among the factors can be seen. The analysis of trade-offs also supports the acceptance of residual risk, discussed below. This method typically involves multiple iterations of the risk analysis to see how the proposed changes affect the risk analysis result.
Another method is to categorize types of safeguards and recommend implementing them for various levels of risk. For example, stronger controls would be implemented on high-risk systems than on low-risk systems. This method normally does not require multiple iterations of the risk analysis.
As with other aspects of risk management, screening can be used to concentrate on the highest-risk areas. For example, one could focus on risks with very severe consequences, such as a very high dollar loss or loss of life or on the threats that are most likely to occur.
7.2.2 Accept Residual Risk
At some point, management needs to decide if the operation of the computer system is acceptable, given the kind of severity of remaining risks. Many managers do not fully understand computer-based risk for several reasons: (1) the type of risk may be different from risks previously associated with the organization or function; (2) the risk may be technical and difficult for a lay person to understand, or (3) the proliferation and decentralization of computing power can make it difficult to identify key assets that may be at risk.
Risk acceptance, like the selection of safeguards, should take into account various factors besides those addressed in the risk assessment. In addition, risk acceptance should take into account the limitations of the risk assessment. (See the section below on uncertainty.) Risk acceptance is linked to the selection of safeguards since, in some cases, risk may have to be accepted because safeguards are too expensive (in either monetary or nonmonetary factors).
Within the federal government, the acceptance of risk is closely linked with the authorization to use a computer system, often called accreditation, discussed in Chapters 8 and 9. Accreditation is the acceptance of risk by management resulting in a formal approval for the system to become operational or remain so. As discussed earlier in this chapter, one of the two primary functions of risk management is the interpretation of risk for the purpose of risk acceptance.
7.2.3 Implementing Controls and Monitoring Effectiveness
Merely selecting appropriate safeguards does not reduce risk; those safeguards need to be effectively implemented. Moreover, to continue to be effective, risk management needs to be an ongoing process. This requires a periodic assessment and improvement of safeguards and re-analysis of risks. Chapter 8 discusses how periodic risk assessment is an integral part of the overall management of a system. (See especially the diagram - Figure 8.2 in Chapter 8)
The risk management process normally produces security requirements that are used to design, purchase, build, or otherwise obtain safeguards or implement system changes. The integration of risk management into the life cycle process is discussed in Chapter 8.
7.3 Uncertainty Analysis
Risk management often must rely on speculation, best guesses, incomplete data, and many unproven assumptions. The uncertainty analysis attempts to document this so that the risk management results can be used knowledgeably. There are two primary sources of uncertainty in the risk management process: (1) a lack of confidence or precision in the risk management model or methodology and (2) a lack of sufficient information to determine the exact value of the elements of the risk model, such as threat frequency, safeguard effectiveness, or consequences.
The risk management framework presented in this chapter is a generic description of risk management elements and their basic relationships. For a methodology to be useful, it should further refine the relationships and offer some means of screening information. In this process, assumptions may e made that do not accurately reflect the user's environment. This is especially evident in the case of safeguard selection, where the number of relationships among assets, threats, and vulnerabilities can become unwieldy.
The data are another source of uncertainty. Data for the risk analysis normally come from two sources: statistical data and expert analysis. Statistics and expert analysis can sound more authoritative than they really are. There are many potential problems with statistics. For example, the sample may be too small, other parameters affecting the data may not be properly accounted for, or the results may be stated in a misleading manner. In many cases, there may be insufficient data. When expert analysis is used to make projections about future events, it should be recognized that the projection is subjective and is based on assumptions made (but not always explicitly articulated) by the expert.
Risk management touches on every control and every chapter in this handbook. It is, however, most closely related to life cycle management and the security planning process. The requirement to perform risk management is often discussed in organizational policy and is an issue for organizational oversight. These issues are discussed in Chapters 5 and 6.
7.5 Cost Considerations
The building blocks of risk management presented in this chapter can be used creatively to develop methodologies that concentrate expensive analysis work where it is most needed. Risk management can become expensive very quickly if an expansive boundary and detailed scope are selected. It is very important to use screening techniques, as discussed in this chapter, to limit the overall effort. The goals of risk management should be kept in mind as a methodology is selected or developed. The methodology should concentrate on areas where identification of risk and the selection of cost-effectiveness safeguards are needed.
The cost of different methodologies can be significant. A "back-of-the-envelope" analysis or high-medium-low ranking can often provide all the information needed. However, especially for the selection of expensive safeguards or the analysis of systems with unknown consequences, more in-depth analysis may be warranted.
Many different terms are used to describe risk management and its
elements. The definitions used in this paper are based on the NIST
Risk Management Framework.
63. The NIST Risk Management Framework refers to risk interpretation as risk measurement. The term "interpretation" was chosen to emphasize the wide variety of possible outputs from a risk assessment.
64. This is often viewed as a circular, iterative process.
July 6, 2007