Question

Following the occurrence of a security incident affecting a network of computer systems, the afflicted company suffered immediate losses in excess of $10 million, a downtime in excess of a month, and with impacts felt across the entire company. Which of the following elements of the logic of loss refers to why this loss mattersA) Extent of Loss

B) Consequences of Loss
C) Appearance of Loss

Answer 1

The 'Consequences of Loss' element refers to the broader impact of the security incident, including operational, reputational, and strategic consequences, not just immediate financial losses.

Step-by-step explanation:

In the context of the security incident affecting the network of computer systems described, the element that refers to why the loss matters is B) Consequences of Loss. This term addresses the broader impact of the incident beyond the immediate financial damages, considering the ripple effects the incident has on operations, reputation, and strategic positioning. For a business, the immediate loss of $10 million, the extended downtime, and widespread disruptions across the company underline the severity of consequences of loss. The incident not only affects the company's current financial status but also jeopardizes its future operations and may lead to what is known as an 'exit' or a shutdown if the losses are sustained in the long run.

For example, the disruptive impact on customers, the loss in productivity, and the potential long-term sales decline due to reputational harm, all quantify the consequences of loss. In assessing and mitigating risks, businesses often need to consider the asymmetric elements of risk, where the cost of prevention may be far less than the cost of the event itself, which could lead to game-changing consequences.

Answer 2

The element that relates to the why the loss matters is the consequence of the loss.

Step-by-step explanation:

The logic of loss is a guideline that precscribes losses are to be considered either in monetary terms or in loss of life so as to permit analysis, on the basis of comparisons, management of risk and policy implementation. Usually, the following elements are identified during this process: cause, extent and consequence.

The cause relates to the damage involved, the extent relates to the size and duration and the consequence relates to the value that will pe lost, either in monetary terms or life. Hence, the importance of a loss is considered when one evaluates its consequences.