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ACCA SBL Sample Answer: Question 5A - Ransomware Response Decision
Format: Emergency Board Paper
Time Allocation: 45 minutes
Marks: 25 marks (20 technical + 5 professional skills)
EMERGENCY BOARD PAPER
TO: Menu-Craft Board of Directors
FROM: Chief Information Security Officer
DATE: [Current Date]
SUBJECT: URGENT - Ransomware Attack Response Strategy and Decision Framework
EXECUTIVE SUMMARY
Menu-Craft has suffered a significant ransomware attack affecting our core systems, with hackers demanding $2M ransom and threatening to publish 500,000 customer records. This paper evaluates response options and recommends immediate actions to protect stakeholder interests while ensuring regulatory compliance.
SITUATION ANALYSIS
Attack Scope and Impact The ransomware has encrypted critical systems including our subscription management platform, customer database, and order processing systems. This directly threatens our 500,000 active subscribers and jeopardizes our subscription-based revenue model worth approximately £180M annually. The threat to publish customer data creates severe GDPR exposure, with potential fines up to 4% of annual turnover (£7.2M maximum).
Stakeholder Impact Assessment
- Customers: 500,000 subscribers face data privacy breach and service disruption, undermining trust in our premium positioning
- Shareholders: Potential revenue loss of £15M per month during system downtime, plus reputational damage affecting market valuation
- Employees: 850 staff face job security concerns and operational disruption
- Suppliers: Payment delays and order disruptions affecting 120+ food suppliers
- Regulators: GDPR breach notification required within 72 hours to ICO
RESPONSE OPTIONS EVALUATION
Option 1: Pay Ransom ($2M)
Advantages:
- Potentially fastest system recovery (24-48 hours) minimizing revenue loss
- May prevent customer data publication, reducing GDPR penalties
- Maintains operational continuity for subscription fulfillment
Disadvantages:
- No guarantee of full data recovery or deletion of stolen information
- Encourages future attacks on Menu-Craft and industry peers
- Ethical concerns about funding criminal enterprises
- Potential legal implications under terrorism financing regulations
- Estimated cost: $2M + potential ongoing extortion
Risk Assessment: High reputational risk if payment becomes public knowledge, undermining customer confidence in our security capabilities.
Option 2: Law Enforcement Collaboration + System Rebuild
Advantages:
- Ethical stance supporting broader cybersecurity efforts
- Potential criminal prosecution deterring future attacks
- Demonstrates commitment to legal compliance and corporate responsibility
- Insurance coverage may apply for rebuilding costs
Disadvantages:
- Extended downtime (4-6 weeks) resulting in £60M+ revenue loss
- Higher probability of data publication and GDPR penalties
- Customer churn risk due to prolonged service disruption
- Estimated cost: £25M (rebuild) + £7.2M (maximum GDPR fine) + revenue loss
Risk Assessment: Severe short-term financial impact but stronger long-term security posture.
Option 3: Hybrid Approach - Partial Payment + Investigation
Advantages:
- Negotiated payment for data deletion only (estimated £500K)
- Rebuild systems independently to ensure security
- Cooperate with law enforcement for investigation
- Balances immediate risk mitigation with ethical considerations
Disadvantages:
- Still involves criminal payment
- No guarantee of data destruction
- Complex negotiation process under time pressure
- Estimated cost: £500K + £15M rebuild + potential penalties
GDPR COMPLIANCE CONSIDERATIONS
Immediate Requirements:
- Breach notification to ICO within 72 hours (legal obligation)
- Customer notification within reasonable timeframe if high risk to rights and freedoms
- Documentation of technical and organizational measures taken
- Impact assessment demonstrating data protection efforts
Penalty Mitigation Factors:
- Swift response and transparency with regulators
- Demonstration of prior security investments
- Cooperation with law enforcement
- Immediate remediation efforts
Financial Exposure: Base penalty assessment suggests £2-3M realistic fine given our cooperation and prior compliance record, rather than maximum £7.2M.
ETHICAL DIMENSIONS
Consequentialist Analysis: Paying ransom may minimize immediate harm to customers and employees but perpetuates criminal activity affecting broader society. The utilitarian calculation must consider industry-wide implications of ransom payments encouraging future attacks.
Deontological Perspective: Categorical duty not to fund criminal enterprises conflicts with fiduciary duty to minimize shareholder losses. Professional ethics require prioritizing customer data protection over financial considerations.
Stakeholder Theory Application: Balancing competing stakeholder interests requires transparent communication and fair distribution of burden. Customer interests in data protection align with societal interests in crime prevention.
FINANCIAL IMPACT ANALYSIS
| Response Option | Immediate Cost | Revenue Loss | Regulatory Fines | Total Impact |
|---|---|---|---|---|
| Pay Ransom | $2.6M | £5M (1 week) | £1M (reduced) | £8.6M |
| Law Enforcement | £25M | £60M (6 weeks) | £3M (mitigated) | £88M |
| Hybrid Approach | £15.5M | £30M (3 weeks) | £2M (mitigated) | £47.5M |
RECOMMENDATIONS
Immediate Actions (Next 24 Hours):
- Do NOT pay the ransom - maintain ethical stance and legal compliance
- Notify ICO immediately - demonstrate regulatory cooperation and transparency
- Engage law enforcement - report to National Crime Agency and local police
- Activate crisis communication plan - inform customers, employees, and suppliers
- Implement business continuity measures - manual order processing and customer service
Medium-term Strategy (Weeks 1-4):
- System rebuild with enhanced security - isolated clean environment with zero-trust architecture
- Customer retention program - service credits and enhanced security commitments
- Insurance claim processing - cyber liability coverage assessment
- Legal action preparation - civil remedies against identified perpetrators
Long-term Resilience (Months 1-6):
- Comprehensive security audit - third-party penetration testing and vulnerability assessment
- Staff training enhancement - phishing awareness and incident response protocols
- Supply chain security review - vendor risk assessments and security requirements
- Board governance strengthening - regular cyber risk reporting and oversight
PROFESSIONAL SKILLS DEMONSTRATION
Evaluation: This recommendation balances immediate crisis management with long-term stakeholder value creation, considering financial, ethical, and strategic implications.
Scepticism: The assumption that paying ransom guarantees data deletion is questionable, given criminal nature of perpetrators and lack of enforcement mechanisms.
Analysis: Quantitative assessment of financial impacts combined with qualitative evaluation of reputational and ethical factors provides comprehensive decision framework.
Commercial Acumen: Understanding that short-term financial losses from ethical stance will strengthen market position and customer trust in subscription-based business model.
CONCLUSION
Despite significant short-term costs, refusing ransom payment and pursuing system rebuild with law enforcement cooperation represents the most responsible approach for Menu-Craft's stakeholders and the broader business community. The recommended strategy protects long-term value while demonstrating ethical leadership in cybersecurity crisis management.
Risk Assessment: Immediate implementation required to minimize customer data exposure and regulatory penalties.
Next Steps: Board approval required for £25M system rebuild budget and crisis communication strategy activation.
Professional Skills Marks Allocation:
- Evaluation: Balanced assessment of response options (5 marks)
- Scepticism: Critical analysis of ransom payment effectiveness (5 marks)
- Analysis: Comprehensive stakeholder and financial impact evaluation (5 marks)
- Commercial Acumen: Understanding of subscription business model implications (5 marks)
- Communication: Professional emergency board paper format (5 marks)
Total: 25 marks