You are the vice-president of internal audit for Kids-Want-Em Ltd. (KWEL), a large, Atlanta-based manufacturer and distributor of high-quality children's toys and games. Your company prides itself on the scientific way in which it designs children's toys and games to foster their intellectual and physical development. Indeed, several of KWEL's computer games have won awards from various parents' and teachers' associations for their novel approaches to teaching children important but difficult mathematical constructs.

One day you are called to a meeting with the president of KWEL, the vice-president of marketing, and the vice-president of information systems. The president reports that she has just been given advance notice by a friend of an article being prepared for a national weekly newspaper about one of KWEL's employees. As best the president can determine, the employee was a member of a "humor" news group on the Internet. Apparently the employee posted a fairly offensive joke to the news group, and several members of the news group then reacted angrily. They responded by posting messages to the news group severely criticizing the posting made by KWEL's employee. Indeed, some members of the news group posted responses that made a personal attack on the employee. The employee in turn responded angrily, and a flame war commenced. The language used within the flame war was highly vitriolic.

The identity of the employee who posted the joke that started the flame war is not known. Apparently the person had used a pseudonym as their identifier. Moreover, until recently it was not known that the source of the message was one of KWEL's computers. The employee had managed to disguise the source of the message with some clever hacking that masked the true address of the source computer. KWEL's name came to light, however, when the employee supposedly sent a letter bomb to one of his or her protagonists. The letter bomb crashed the protagonist's computer system, which belonged to the protagonist's company. As a result, operations within the protagonist's company were severely disrupted because the company had inadequate backup. Thus, they had difficulties effecting recovery of the system. When the president of the protagonist's company discovered the reason for the crash, he was incensed. He called in a computer security consultant to sort out the mess and to try to identify the source of the letter bomb. During the first meeting with the consultant, apparently he indicated he would sue for damages. During the consultant's investigation, he supposedly discovered that one of KWEL's computers was the source of the letter bomb. A reporter from the national weekly newspaper heard about the story and commenced carrying out her own investigations. The results of her investigations were brought to the attention of the president of KWEL's friend, who immediately called the president to inform her of the events.
Required: The president of KWEL asks you to prepare a report outlining

(a) the exposures now faced by KWEL,

(b) the immediate actions that should be undertaken to mitigate these exposures, and

(c) the controls that should be put in place to try to prevent this type of event occurring in the future.