Ensuring Effective Security Budget Justification

The Importance of Budget Justification for Information Security Department

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Question

To justify its ongoing security budget, which of the following would be of MOST use to the information security' department?

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Explanations

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A. B. C. D.

C.

Cost-benefit analysis is the legitimate way to justify budget.

The frequency of security breaches may assist the argument for budget but is not the key tool; it does not address the impact.

Annualized loss expectancy (ALE) does not address the potential benefit of security investment.

Peer group comparison would provide a good estimate for the necessary security budget but it would not take into account the specific needs of the organization.

The most useful measure to justify the ongoing security budget for the information security department would be the annualized loss expectancy (ALE).

Annualized loss expectancy (ALE) is a measure that combines the probability of a security breach occurring with the potential cost of the breach. It takes into account the likelihood of a breach and the potential financial impact to the organization.

The ALE can be calculated using the following formula:

ALE = Single Loss Expectancy (SLE) x Annual Rate of Occurrence (ARO)

Where SLE is the cost of a single security breach and ARO is the estimated frequency of security breaches in a year.

By using ALE, the information security department can demonstrate the financial impact of a security breach to the organization. This can help to justify the budget needed to prevent or mitigate potential security breaches.

While security breach frequency and peer group comparison can provide some useful information, they do not take into account the potential financial impact of a breach. Cost-benefit analysis can be useful, but it is more focused on determining the cost-effectiveness of specific security measures rather than justifying an overall security budget.

In summary, ALE is the most useful measure to justify the ongoing security budget because it provides a comprehensive view of the potential financial impact of security breaches to the organization.