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Chapter 11: Security AdministrationAuditsIn one company, an employee’s spouse passed on inside information to a relative, whopurchased the stock, then sold the stock at a profit after the earnings announcement.That relative made a profit by buying the stock before the earnings announcement(insider trading). The SEC fined the spouse and the relative. The spouse was guilty ofproviding insider information to the relative, who then made the profit on the sale of thestock. Both, therefore, were guilty of insider trading.The IS director of a company asked for authorization to log into the production R/3System. This request raised the concern of the accounting/finance department. Access tofinancial information is typically on a “need-to-know” or “need-to-access” basis, and theIS director did not need to access the production R/3 System. “Red flags” went up whenhe started asking about financial performance information (quarterly earnings), wellbefore this information was made public. He was asking for insider information.ÃYou will need the assistance of your company’s legal department.As a system administrator, you will be affected by two audits: Security FinancialA financial audit is a review of your company’s financial statements by a Certified PublicAccountant (CPA) in the U.S., or their equivalent in other countries. The purpose of theaudit is to issue an opinion on the company’s financial statements. This opinion essentiallystates that the financial statement represents fairly the financial position of the company. Afinancial audit is usually not an option. If your company’s stock is traded on the stockmarket, the audit is required by the Securities and Exchange Commission (SEC) in the U.S.,or its equivalent in other countries. If your company is private, a financial audit could berequired by creditors.As a part of the financial audit, the CPA will typically do a security audit of R/3 and theassociated systems. The purpose of the security audit is to determine how much reliance can11–4Release 4.6A/B