Cyberattacks in Public Companies & Koss Corporation

Cyber-attacks in Public Companies and Koss Corporation
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Cyber-attacks in Public Companies and Koss Corporation
Cyber-attacks in Public Companies
Question 1
The requirements for cyber-attacks disclosure were passed by the SEC in October 2011 and aimed to ensure increased reporting for an organization for any losses and incidences relating to attacks. According to the SEC, organizations must disclose all matters about cyber incidents especially when such occurrences have a significant impact on the ability of the investors to make decisions on their investments in the enterprise (Johnson, 2015). Entities should also report the controls and procedures against cyber incidents. One of the effects of this disclosure requirement is that it will enhance the integrity of reporting of qualitative information which is ignored by the typical financial statements. However, the disclosure is likely to cause adverse effects to the firm given the negative publicity that will be interpreted by the investors as an organization lacks of ability to protect its resources. Consequently, this may translate to negative earnings. A recommendation to the disclosure on the cyber-attacks is to require that firms provide regular updates about their cybersecurity controls, the expertise available within the entity for controlling attacks and organizational framework for addressing the gaps, rather than the mere reporting of the incidences which harm the reputation of th…