Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
206 Cards in this Set
- Front
- Back
4 categories of hardware
|
input processing storage output
|
|
Input devices
|
the starting point for accounting data collection
|
|
Data transcription
|
converting source documents into computer readable form, either automatically or manually.
|
|
Automatic input methods
|
it helps ensure accuracy, timly and cost effective ways of gathering and inputing accounting data.
|
|
Bar Code reader
|
reads the bar code attached to a product. Barcode includes price and quantity. It can be used to reduce input time and error. centralize price information. you can change the price on the computer instead of all of the products manually.
|
|
Magnetic Ink Character Recognition
|
used by banks to automatically read the magnetically coated characters imprinted at the bottom of checks. Only used by banks.
|
|
Bank routing number
|
First group of numbers under a check. machine readible
|
|
Optical Character Recognition
|
Uses optical readers and light sensing mechanisms and laser technology to recognize characters. Scantrons, preprinted bills, airline tickets.
|
|
Plastic cards with Magnetic strips
|
Identification, credit card number, balance, other information.
|
|
Microcomputer input devices
|
Keyboard mouse, trackpad
Computer pen, iPad PDA. |
|
Biometric scanner
|
used to autotenitcate users on physical characteristics. several ways to authenticate a users. based on who you are. it can either be a behavioral system(signature/voices) physiological (fingerprints, iris, retina)
|
|
iris scan/finger print
|
iris scanners are more popular, they have different vein patterns on the same person.
|
|
Enrollment
|
process of creating digital templates for individuals. Sample from individual to be authenticated, to the digital template, they match, you are authenticated, if they dont.
|
|
Bar code vs Radio Frequency Identification
|
Barcodes are attached to items. Rfid tags are embedded into the product. RFID can be used to monitor how many items that are inside of a box. for barcodes you have to hold the scanner close.
|
|
UPS/FedEx
|
They use RFID technology as things are movign to the wearhouse without opening obxes.
|
|
EZ Pass System
|
Toll booths in Toll Roads. Magnet thing attached to the car. there is an automatic charge wth each zap.
|
|
process data
|
converting data into meaningful information.
|
|
central processing unit (CPU)
|
processor.
Controlunit and aritmetic logic unit (ALU) |
|
ALU
|
performs all the calculations. performs the aritmetic applications such as addition/subtraction. Logical tasks as comparing 2 numbers
|
|
Control unit
|
Used for supervising the activities in the ALU. Can be used to coordinate the calculations or operations of the ALU unit.
|
|
RAM
|
Random Access Memory. The more ram the faster. The main location for temporary storage.
|
|
what needs to happen for a software program to run?
|
it must be first loaded into the computer’s RAM, then transferred to and processed by the ALU, as directed by the control unit.
|
|
Bottleneck
|
represented by RAM
|
|
Cache Memory
|
Very high-speed memory that stores data and insturctions needed by the CPU.
|
|
Magnetic Disk
|
Large Storage Capcities
Direct access |
|
Flash memory
|
Flash (usb) 128-256GB
PCMCIA memory cards used with lap |
|
Solid state technology
|
No moving parts. Moves faster, more efficient.
|
|
PCMCIA
|
memory ccards used with laptops
|
|
DVD
|
More memory than a cd with DUAL LAYERS
|
|
Data Communications
|
Transmitting Data to and from different locations over a network.
|
|
Wired Communications Channels
|
Twisted pair wire
Coaxial Cables Fiber Optics |
|
Twisted Pair Wire
|
Copper wire, Twisted to enhance the signal transmission
|
|
Coaxial Cables
|
Used for cable television, capable of far higher transmission speeds
|
|
Fiber Optic cable
|
Carry only digital signals.
Very high speeds in light pulses HIgher bandwith and less interference |
|
Wireless
|
Microwaves
Satellites |
|
MIcrowaves
|
High frequency radio waves that travel along a line of sight path.
Relayed via repeater stattions. Very high bandwith, it carries over half of television and telephones in the u.s. |
|
Satellites
|
Radio signals are sent from a ground stations. Much longer geographical distance, and leasing time can be very expensive
|
|
Infared transmission
|
Remote control. Can only travel a very short distance. cannot penetrate objects
|
|
Communcation devices
|
Attached to a computer system, can be used to convert signals back and forth to convert signals from analog to digital
|
|
Modem
|
Modulator demodulator
Converts at 56k transmission. COnverts digital signals into analog for transmission over phone lines. |
|
DSL
|
Digital Subscriber lines.
Alternative to ISDN. Higher transmission speed to ISDN so it replaced it. downloading (uploading) speeds up to 6 mbps (384 kbps). |
|
ISDN
|
Integrated Services Digital Network
Both use telephone lines. The Telephone line in ISDN carries both analog and digital signals. One line is for voice, and the other one is for digital data. Requires proximity to phone company switching station. |
|
Cable Modem
|
speeds up to 15 mbps for downloading and up to 1 mbps for uploading
|
|
LAN
|
Local Area Network
The Mihalo college has a LAN network. With servers, computers printers and computer files. most LANs cover a single or several buildings. Can purchase softwre for one computer and have it used for all the computer. Save software costs |
|
WAN
|
Wide Area Network.
Linking Several LANs Together. Internet is the Largest WAN in the world. It links all the local area networks together in the world |
|
Client/Server community
|
The most important archetecture in a network environment Three interacting components
Presentation: View Application-logic: processes reqeusts Data Management: database query and updates. |
|
Client
|
A computer that requests the service
|
|
Service
|
A computer that provides the service.
|
|
Presentation
|
The users view of the system. Handles the user interface. Web browser, the websites are PRESENTED on a web browser
|
|
Application-logic layer:
|
server side. You search for something on amazon.com. YOur search request goes to the application logic layer of the amazon server. The application layer recieves the request and it forwards this request to the database
|
|
Data Management Layer
|
Database. Has all the information and updates. Relevent information is retreieved from this layer and given to the presentation layer of the website.
|
|
Where did the internet evolve from
|
A variety of university and government-sponsored computer networks built largely for reserach.
|
|
IP ADDRESS
|
Each computer connected to the internet has unique internet address.
|
|
74.xxx.xx.xx
|
Class Number
|
|
xx.125.xx.xx
|
Organization Number
|
|
xx.xxx.95.xx
|
Computer group
|
|
xx.xxx.xx.99
|
Specific computer.
|
|
Domain Name
|
URL. Makes things much easier, it is translated into an ip address.
|
|
Translation of an ip address.
|
Example: www.google.com =74.125.95.99
|
|
Three levels of domain names
|
1st .com, Org Net EDU GOV
2nd site name 3rd specific computer. |
|
TCP/IP
|
Packet switching technology to transmit data.
Example when you send an email, it is broken into packets, each packet is sent into different routes, when it arrives to the destination it is reassembled. |
|
Why do packets have to switch?
|
If there was a nuclear attack in SF you can still send email because it can travel around it.
|
|
Protocols to achieve packet switching
|
TCP protocol. Rules and procedures that govern the process of data transmission over the internet. Protocol divides file into packets and the methods for reassembling the original file at the destination.
|
|
IP
|
Specifies the structure of the packets and routing path. To determine how each packet is routed through the internet.
|
|
TCP
|
How files are broken down into packets. How packets are sent into the internet.
|
|
Intranets
|
Only accessible, by authorized employees.
|
|
Extra net
|
All employees can access plus some selected users outside of the corporation. Such as authorized suppliers and customers.
|
|
Virtual Private Network
|
ONLY authorized users can access this. A private network that is developed based on a public network(internet). Private network within a larger public network.
|
|
How to set up a VPN.
|
1. Create private communication channels.
2. Authenticating all users before permitting any data transmission 3. encrypting all data transmission. |
|
Electronic Commerce
|
buying/selling goods and services electronically.
|
|
Internal Control
|
Describes the policies, plans and procedures implemented by a firm to
1. safeguard assets 2. check the accuracy and reliability of accounting data 3. promote operational efficiency 4. to encourage adherence to prescribed managerial policies. |
|
3 types of controls
|
Preventive
Detective Corrective |
|
Components of Internal Control
|
1. Control Environment
2. Risk Assessment 3. Control Activities 4. Information and Communication 5. Monitoring |
|
The Control Environment
|
Establishes the tone of a company
Influences the control awareness of the employees |
|
Control Environment Factors
|
Managment philosophy and operating style
The integrity, ethical values and competence of employees Assignment of authority and responsibility. The attention and direction provided by the board of directors |
|
Corporate Governance
|
Managing an organization in a fair, transparent, and accountable manner to protect the interests of all the stakeholder groups.
|
|
Example of a Control Environment
|
Employee training programs that inform new hires about the company's various policies, outline individual responsibilities and explain how to perform duties efficiently.
|
|
Risk Assessment
|
The purpose of risk assessment is to identify organizational risks, analyze their potential in terms of costs and likelihood of occurrence, and install those controls whose projected benefits outweigh their costs.
|
|
The more liquid the asset
|
the greater the risk of its misappropriation. Stronger controls are needed for increased risks.
|
|
Cost-Benefit Analysis
|
used to determine whether the cost to implement specific control procedure is beneficial enough to spend the money.
|
|
Batch totals
|
1. financial control totatl
2. record count 3. Hash total |
|
Financial control total
|
sums a field that controls dollar amounts.
|
|
Record count
|
sums the number of transactions
To make sure all transactions have been acounted for and there are no duplicates. |
|
Hash Total
|
non-financial numeric field.
Sales order: Sales order #s Meaningless number. |
|
How does hash total work.
|
You calculate 1,2,3,4,5...100transactiosn and you get 5050. if the number is wrong then you can have another degree of prevention of processing errors.
|
|
Audit trail
|
Validating processing results including source documents, transaction listing and activity listing
|
|
Transaction listing
|
a record of all successful transactions.
|
|
Output controls
|
Regulate the distribution and minimize the loss, stealth or misdirection of printed output.
|
|
For the application controls to work
|
the general controls have to be strong for the application control to work.
example strong validation rules without password protection. NO point. |
|
Information Technology Auditing
|
evaluationg the computers role in achieving audit objectives and control objectives
|
|
Control Objectives:
|
Security
Availability Processing Integrity Online privacy and confidentiality. |
|
INternal auditor
|
Carried out by companies own employees
1. employees follow company policies/procedure. 2. evaluate internal controls 3. operational efficiency and effetivness. evaluate performance to each dept. Make recommendations to each dept. |
|
External Auditing
|
CPA firms.
internal control audit. financial audit: financial statement audit. issue 2 reports 1. internal control report 2. independent opinion about financial statements vs. company performance. |
|
Fraud audit
|
forensic accounting: prevents and detects fraud.
|
|
Overlapping areas in external/internal
|
internal auditing evaluate internal control on a regualar basis, the results will be used by external auditors.
|
|
IT auditing
|
3 main steps:
1. prelim evaluation of system 2. testing the control procedures 3. substantive tests of transactions and balances. |
|
Prelim evaluation
|
decides whether the computer system is worthy of an audit of internal controls.
|
|
Testing control procedures
|
Audit of the information system. the auditor will make a detailed anaylsis of general and application controls
Compliance testing |
|
Complinace testing
|
ensure that the controls are in place and work as prescribed
|
|
Substantive tests of transactions and account balances.
|
Strong controls>fewer substantive tests
Weak Controls> more substantive tests. |
|
substantive test
|
extra tests of internal controls depending on how strong the system is. Randomly select 100/1000 A/R transactions. call the customers to confirm the transactions.
|
|
Threats
|
errors and irregularities facing the AIS.
|
|
Risk Based Audit Approach
|
1.Determine the threats
2. Systems review 3. Evaluating the control procedures within the AIS 4. Evaluate Weakness. |
|
B2B Transactions
|
Vendor and Business.
|
|
B2C Transactions
|
Between Business and End User consumer.
|
|
EDI Electronic Data INterchange
|
allows organizations to transmit stamdard business documents over high speed communications channels. Instead of printing out a sales invoice and mailing it. both company set up an edi system and they send the documents over the internet.
|
|
E payment service
|
Intermediary. Collects money from the buyer and sends the moey to the seller. the major benefit of this service is that you only provide your credit card information to the e payment service, not the seller.
|
|
Credit card vs Epayment
|
If you use a credit card you have to furnish your personal information to 100 different people while if you use an epayment service you just use one. They also verify your information, to help prevent internet fraud.
|
|
Advantages of EDI
|
Streamlines the Business process. Exchange is done more quickly and efficiently.
EDI eliminates the paperwork. Saves cost. |
|
2 types of issues for an internet presence for companies
|
1. Privacy issues
2. Security issues. |
|
Privacy issues
|
Companies are responsible for protecting the privacy of personal information
Companies collect and use their customers’ personal information in compliance with their privacy policies |
|
Security issues
|
safeguard an organization’s electronic resources and limit access to authorized users. Not unauthorized, because the company will have information from customers.
|
|
Hacking
|
accessing and using computer systems without permission, usually by means of a personal computer and telecommunication network
|
|
What techniques are used to computerized Ais
|
Auditing around the computer, Auditing through the computer.
|
|
Auditing around the computer
|
examit the inputs and outputs on a sample basis.
Test transactions occur. The systems outputs are compared to the hand done outputs done by the auditor. If there is descrepencies, then there is an output. |
|
Major drawback from auditing around the computer
|
The tests are done with the normal transactions. Exceptional situations are not included.
|
|
Auditing Through the Computer
|
Test computer programs, and internal controls built within.
Test a variety of general controls. |
|
Test Data
|
Test transactions are designed by the auditor, they contain errors. This is to tetst how well the internal controls.
|
|
Integrated Test Facility
|
More comprehensive test technique that audits an AIS in an operational setting.
Establish a fictitous entity such as a dpetment branch, customer, or employee. entering artificial transactions for that entity observing how these transactions are processed. |
|
Parallell simulation
|
Each transaction is tested twice. once by the simulation program and once by the client program.
|
|
Simulation program
|
created by the auditor, he has to know how the clients computer system works. it is so costly. most CPA firms don't do this.
|
|
Which is most cost prohibitive computer program audit?
|
Parallel simulation
|
|
Program Change control
|
if a company wants to make changes to a program, it is subject to stringent program change controls.
All program changes must be documented, costed and more importantly, authorized and thoroughly tested. The documentation must match the production version of a program. |
|
Program compariosn
|
Guards against unauthorized program tampering by performing certain totral tests of program authonticity
|
|
Test of length
|
compare
|
|
Comparison program
|
2 programs are tested line by line.
minor changes can be detected |
|
Review of system software
|
generates outputs athat are important for monitoring a companys computer system.
|
|
Logs
|
record the use of computer resources
|
|
The IT auditor needs to verify
|
the parameters of access control software are set appropriately and make sure the IT staff are using tem appropriately
|
|
Parameters of access control
|
defining the scope of each Login Name and Password.
You should only be allowed to have access to programs that you are entitled. Your access privileges should have a parameter of accounting software. No need for accounting people to access manufacturing applications. |
|
Inactivity
|
when you have an employee that is fired, he should have no access to the computer. Inactivity will be detected and will find an account that has been inactive for a several months. the best explanation is that the employee has been terminated.
|
|
Logging in at odd hours
|
considered odd activities, and recorded in a log file. it will be recorded, and auditors can review these files to make sure they dont represent fraudulent activities. `
|
|
Continuous Auditing
|
Auditing can be performed even when the auditor is not around.
|
|
embedded audit module
|
Captures transaction that are under a specific criteria in a clients system. Specific requirements, #of hours worked is greater than 40, then it would be treated as abnormal, so it is recorded. It is then printed out and given to the auditor for a special view.
|
|
Transaction Tagging
|
Some transactions will be tagged so they can be recorded as they pass through the AIS. IF the auditor is interested in internal controls on the payroll. he selects employees (lowmedand highsalaries) how the payroll system processes the transactions. they are tagged.
|
|
Snapshot technique
|
Preprogramed to take pictures of transactions and their general ledger files before and after specified processing points. The before and after pictures are compared. The last processing point is to update the customer balance.
|
|
Continuous and intermittent simulation
|
insert module into clients program, or some transactions will be generated twice between clients and auditors program.
if descrepencies exist, it is posted in a log file. Serious discrepencies are notified. it can stop updates if it is serious. Similar to program simualtion. |
|
Assurance vs Audit
|
Assurance is a broader concept. the information is not limited to financial information, it can refere to relatibiltiy and accuracy of infosystem. it can refer to efficiency, security. anykinds of information. Auditing involves just financial information.
|
|
Webtrust
|
Type of Assurance about relaiblitiy of information systems. It deals most with online transactions. some of the smaller merchants need to have this because it is a seal of trust. The merchants displays this seal on their website. so the consumer is more comfortable about their system.
|
|
Systrust
|
Reliability of the information system.
|
|
Hard copy output options
|
Printers:
Dot Matrix Ink Jet Laser printer |
|
Dot matrix printers:
|
mainly used for generating multiple copies simultaneously.
|
|
Ink Jet printers:
|
higher print quality and speed
|
|
Laser printers:
|
superior print quality and much faster output speed
|
|
2 types of Output Devices
|
Hard Copy
Soft Copy |
|
Soft copy output options
|
Video output (video screen displays)
Examples: computer monitor, stadium scoreboards, airport display screens CRT and LCD (flat panel) monitors HDTV |
|
What resolution is HDTV?
|
in the range of 1920x1080 pixels
|
|
Computer Software
|
Instructions that the computer hardware can execute.
|
|
2 categories of Computer software
|
Operating Systems
Application Software |
|
Operating systems
|
a set of software programs that runs the computer itself and the application programs designed for it.
Mac OS, Windows Vista, Linux |
|
Application Software
|
Programs written for performing the job-specific tasks. helps end users such as accountants perform the tasks specific to their jobs or relevant to their personal needs.
|
|
Utility Programs
|
Come with operating systems help users perform such tasks as copying files, converting files from one format to another, compressing files, system diagnostics and building disk directories.
|
|
Single user operating systems
|
Windows xp, Mac OS
|
|
Cell phone operating systems
|
Windows mobile, blackberry, bluetooth, Palm OS and Symbian OS
|
|
Graphical user interfaces (GUIs)
|
menus, icons, and other graphics elements(instead of instruction commands) to identify system components and launch processing programs
|
|
What is the first piece of software loaded into primary memory when the computer powers up?
|
The operating system
|
|
Application (end user) programs
|
designed to work with a particular operating system.
|
|
How does the operating system coordinate Application Programs.
|
The operating system coordinates those programs input an output tasks, by managing the pieces of a large application program that is too large to fit entirely in RAM
|
|
Types of Application Software
|
Personal productivity software
Accounting software Communication software. Project management software computer aided design(CAD) software |
|
Project management software
|
for coordinating and tracking the events resources and costs of large projects such as construction projects or office moves
|
|
computer-aided design (CAD) software
|
for designing consumer products, clothing, automobiles, or machinery.
|
|
Presentation graphics software
|
for creating slides and other presentations.
|
|
Personal Productivity software
|
Word processing (e.g. Microsoft Word)
Spreadsheet software (e.g. Microsoft Excel) Database software (e.g. Microsoft Access) Presentation software (e.g. Microsoft PowerPoint) Personal finance software (e.g. Quicken) Computer-aided design (CAD) |
|
Accounting Software
|
Small business, midrange, ERP
|
|
Reasons why IT is important to accountants
|
IT must be compatible with AIS
IT will effect how they work in the future Auditors must evaluate computerized systems Auditors must evaluate effectiveness and efficiency of IT IT questions are on professional certification exams Accountants often help clients make IT decisions. |
|
Reasons why IT is important to accountants
|
IT must be compatible with AIS
IT will effect how they work in the future Auditors must evaluate computerized systems Auditors must evaluate effectiveness and efficiency of IT IT questions are on professional certification exams Accountants often help clients make IT decisions. |
|
Reasons why IT is important to accountants
|
IT must be compatible with AIS
IT will effect how they work in the future Auditors must evaluate computerized systems Auditors must evaluate effectiveness and efficiency of IT IT questions are on professional certification exams Accountants often help clients make IT decisions. |
|
Point of Sale (pos) devices
|
Barcode readers: designed to read the barcode attached to a product
Reduce input error and centralize price information |
|
Hacking
|
accessing and using computer systems without permission, usually by means of a personal computer and telecommunications network.
|
|
Cracking
|
Example is Cracking passwords for trial versions.
removing software protection designed to prevent unauthorized duplication Many websites provide crack codes that let you use trial versions |
|
Denial of service (DOS) attack
|
A coordinated attack on a computer system.
to deny a service provided by a company. Using thousands of computers that target a company website. |
|
Zombie
|
a network of hijacked computers. They are under the control of an attacker. they are triggered by a set of instructions by a hacker.
|
|
Phreaking
|
attacking a phone system in order to make free calls or disrupt services. to make free phone calls.
Some hackers hacked the Voicemail of the NYPD "we are too busy drinking coffee aand eating donuts" to disriupt service |
|
Sniffing
|
Electronic eavesdropping
Sniffing program will intercept all the network traffic. including username and passwords. All this information will be saved in a log file and the hacker can access it. Capture packets as they travel over computer networks and sift captured data for confidential information. |
|
Spamming
|
Sending unsolicited mass emails.
|
|
Social engineering
|
obtain confidential information by tricking people
Convincing a person in authority to reveal such sensitive information as passwords or computer codes to an unauthorized recipient. -Spoofing and Phishing -Vishing -Posing |
|
Nigerian Scheme
|
A spam sent about a nigerian queen
|
|
Spoofing and Phishing
|
email pretending from a legitimate company and request confidential information.
Like an email from ebay with a prompt to sign into the website. Your login information is then given to hackers from a fake website |
|
Vishing
|
Voice phishing, emails requesting recipients to call a specified phone number.
instead of a website, it asks you to call a number and punch in your personal information |
|
Posing
|
Hackers Set up a website, it looks legit. which sells items for a deep discount. You set up an account and provide personal information such as credit card number.
|
|
Malware
|
Malicious software that is designed to disrupt or disable a computer system.
Spyware adware keylogger trojan horse time bomb trap door virus worm |
|
Spyware
|
secretly collect personal information, like spending habits and website history.
|
|
Adware
|
Popup banner ads delivered by spyware.
Usually bundled with free software. Free software developer gets paid by adware developer to bundle software. |
|
Keylogger
|
records keystrokes. Parents can use this .Employees can use it. Hackers can use it to steal information.
|
|
Trojan Horse
|
Malware
Set of malicious computer instructions in an innocent looking computer program. Time Bomb |
|
Time Bomb
|
Trojan horse that lie dormant until triggered by a specific time or circumstance.
Can be weeks after. |
|
Trap Door
|
Backdoor, a way into the computer system. Allows you to bypass the normal system controls
|
|
Virus/worm
|
Self replicating malicious programs. usually you get this from an email attachment.
|
|
Security Procedures
|
Safeguard an organizations electronic resources and limit access to authorized users
Firewall Proxy servers Intrusion detection systems Data Encryption |
|
Firewall
|
guards against unauthorized access to sensitive file information from external internet users.
Can be hardware or software. windows has a firewall program. Compares IP address with ACL file |
|
Firewall protection by inclusion
|
software examines packets of incoming messages and limits entry to authorized users
ACL has a list of valid ip address example 100 companies. |
|
Firewall protection by exclusion
|
Denies access to unauthorized users.
ACL has a list of invalid ip addresses. |
|
ACL file
|
Access control list. Controls incoming traffic.
List of ip addresses |
|
Proxy Servers
|
Similar to a firewall. A computer and related software can be used to control Web accesses.
|
|
Advantages of proxy servers:
|
Funnel all internet requests through a single server.
Examine all incoming requests for information and test them for authenticity (acting like a firewall). Limit employee Internet access to approved Web sites. Store frequently accessed web pages on the server’s own hard disk (cache). |
|
Difference between proxy and firewall
|
The Proxy can control incoming and OUTGOING. The firewall is just incoming traffic control.
Proxy server has a cache feature, and it can save lists of frequently used websites. |
|
Intrusion Detection system
|
logs of network traffic and analyzed logs for signs of attempted or successful itnrusion.
all net traffic will be saved in an ids log. the administrator can browse the log. Passive and Reactives |
|
Passive IDS
|
Creates logs and alert network administrator to them
|
|
Reactive IDS
|
detect potential intrusions dynamically, log off potential malicious users and even reprogram a firewall to block further messages from the suspected source.
|
|
Data Encryption
|
Transforms plaintext messages into unintelligible cyphertext (Gibbereish) using an encryption key.
Example is shifting each letter 3 positions to the right. |
|
Decryption
|
decodes the encrypted messages back plaintext.
|
|
Two Types of Encryption Systems
|
Secret Key
Public Key |
|
Secret Key encryption
|
The same key is used both to encrypt and to decrypt and shared by the communication parties.
The number of secret keys become difficult to manage when a large number of parties are involved. No way to prove who create a specific document. |
|
Public key encryption
|
a pair of public/private encryption keys are used.
The sending party uses the recipient’s public to encode the message, and the receiving party uses the corresponding private key to decode it. The public keys are freely distributable. It is possible to prove who create a specific document with a digital signature. |
|
Drawbacks with Secret key
|
if you want to exchange encrypted email messages. for each friend, you have to create a seperate secret key. If you use the same secret key for all messages, then everybody will know what you said to everybody else.
|
|
Digital Signatures
|
The digital signature is created by encrypting the message with the sender’s private key, and is decoded using the corresponding public key.
can be used to authenticate business documents: if a company’s public key decodes a message, then that company must also have created the message provides assurance that the message has not been altered. |