Flag The following article about another stock Flash Crash due to a fat finger mistake appeared on CNBCs website on Friday, March 23, 2012. Unlike other recent Flash Crashes, this Fat Finger mistake was also coupled with a previously undetected software bug (as described in the article below.) Ironically, the company that developed the software (BATS) launched their IPO on that very same day and fell victim to their own software bug. (This story should be included in the definition of "having a bad day" by a computer programmers at BATS.) Part A of this question addresses the first mistake of "fat fingering", which is a common cause of several recent stock flash crashes. The question is simply asking you to recommend three possible controls that organizations should have in place to prevent fat-finger mistakes. Part B of this question addresses the "logical programming error" that was a previously undetected software glitch in the BATS application program. The question is asking you, as an IT Auditor, to identify two areas in the overall IT Audit program / Plan from chapter 4 where vulnerabilities such as this would be addressed. "Apple Flash Crash: Stock Halted After Trade Causes 9% Plunge" Friday, 23 Mar 2012 | 8:12 PM ET Text Size By: John Melloy Shares of Apple, the worlds most valuable company, plunged 9 percent on a single trade, causing it to be halted by the single stock circuit breaker rule because of volatility. A single trade of 100 shares at a price of $542.80 hit the tape at 10:57 coming from the BATS Exchange. The previous trade seconds earlier was at a price of $598.26. "It looks like a fat finger mistake," said Joe Terranova, chief market strategist for Virtus Investment Partners. But there could be other factors involved. Nine minutes before the way out of market trade took place, BATS sent an alert stating, "Please be advised that BATS is currently investigating system issues trading in symbols range A through BF." Ironically, the BATS exchange began trading as a public company today after a $101 million initial public offering priced last night. Apple resumed trading shortly thereafter, recovering all the loss and was little changed on the day. UPDATE: Late Friday, BATS put out a post-mortem about exactly what happened, blaming a software bug for the problems. At 10:45 am, a "single match engine" that handles trading in stocks starting with symbols ranging from "A" to "BF" "encountered a software bug related to IPO auctions, which rendered open customer orders in this symbol range inaccessible," the company said. That's why trading in shares of Apple also went haywire its ticker symbol "AAPL," falls in that range. "The stale BZX quotes seen in BYX were the cause of three clearly erroneous trades in AAPL, which were cancelled between 11:49 am and 12:34 pm ET," BATS said. The glitch also affected the IPO for BATS own stock, ticker symbol "BATS," which ultimately led to the company withdrawing its IPO completely. Part A This question addresses the first mistake of "fat fingering", which is a common cause of several recent stock flash crashes.

PART A :The question is simply asking you to recommend three possible controls that organizations should have in place to prevent fat-finger mistakes. (9 points)

Part B - This question addresses the "logical programming error" that was a previously undetected software glitch in the BATS application program. The question is asking you, as an IT Auditor, to identify two areas in the Phases of an IT Audit in Chapter 1 where vulnerabilities such as this would be addressed and to provide a description of how it would be addressed. (6 points