Lizards Corporation is a retailing business with stores and warehouses throughout Australia. The company is in the process of designing new integrated computer-based accounting information system. Together with the design of the new system, company management is reviewing data processing security to determine what new features should be incorporated. Two key areas of concern include (1) confidentiality of company customer records and (2) safe keeping of computer equipment, files, and electronic data processing (EDP) facilities.

The new accounting information system will be employed to process all company records which include sales, purchases, financial budget, customer, creditor and personnel information. The stores and warehouses will be linked to the main computer at corporate headquarters by a system of remote terminals. This arrangement will permit data to be communicated directly to corporate headquarters or to any other location from each location throughout the terminal network.

At the present time certain reports have restricted distribution, either because not all levels of management need to receive them or because they contain confidential information. The introduction of remote terminals in the new system may provide access to this restricted information by unauthorised personnel. Lizards Corporations top management is concerned that confidential information may become accessible and may be used improperly. The company is also concerned with potential physical threats to the system, such as sabotage, fire damage, water damage, power failure and magnetic radiation. Should any of these events occur in the present system and cause a computers shutdown, adequate backup records are available to enable the company to reconstruct necessary information at a reasonable cost on a timely basis. However, with the new system, a computer shutdown would severely limit company activities until the system becomes operational again.

Required

(1) Identify and briefly explain the problems Lizards Corporation could experience with respect to confidentiality of information and records in the new system.

(2) Recommend measures Lizards Corporation could incorporate into the new system that would ensure the confidentiality of information and records in the new system.

(3) Identify safeguards that Lizards Corporation can develop to provide physical security for its (a) computer equipment, (b) files, and (c) EDP facilities.