Magazine article The CPA Journal

Preventing Digital Disasters

Magazine article The CPA Journal

Preventing Digital Disasters

Article excerpt

The digital world is an ecosystem teeming with life and supporting an abundance of trade, commerce, and culture. Petabytes of data stream continuously over public and private networks, with content ranging from instant messaging chatter to highly sensitive financial records. People with bad intent sometimes attack networks. Whether they are professional thieves prowling for account numbers or bored teenagers intent on mischief, these parasites disrupt commerce, steal information, and do billions of dollars worth of damage every year. Their actions can have devastating long-term consequences for an unwary individual or business.

The Federal Trade Commission estimates that identity theft alone has cost American businesses and consumers more than $48 billion over the past five years. Once a thief assumes another person's identity, clearing up credit records and restoring one's good name can take year's of hard work. And while juggling calls from collection agencies and resolving problems with banks and credit bureaus, the victim will still likely be denied access to basic financial tools and services such as home mortgages and small business loans.

A major source of digital pollution is outdated computer equipment. The U.S. Environmental Protection Agency (EPA) estimates that a quarter billion personal computers will be made obsolete by 2005. The International Association of Electronics Recyclers predicts that by 2010 the mountain of scrapped computers will quadruple to one billion units. The physical disposal of information technology presents formidable challenges. A typical CRT monitor, for example, contains three to nine pounds of lead. Printed circuit boards contain beryllium, cadmium, flame retardants, and other toxic compounds that can seep into groundwater or escape into the air when incinerated. The problem is so daunting that the EPA has identified e-waste as the nation's fastest-growing waste stream, and many states and municipalities now ban the disposal of monitors and other equipment into the nation's landfills.

For example, California Civil Code section 1789.82 (formerly known as SB 1386), California's Mandatory Disclosure Statutes, requires all entities that do business in California to disclose information security breaches to every California resident whose data was acquired by an unauthorized person. Other states that are considering similar statues include New York, New Jersey, Idaho, and Indiana.

Ghosts in the Machines

Unfortunately, the danger is not limited to the physical realm. Ghosts in those machines-unerased information left on hard drives and other storage devices-represent a digital disaster waiting to happen. …

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