• Gordon, Lawrence A. and Martin P. Loeb, “Budgeting Process for Information Security Expenditures,” Communications of the ACM, January 2006, pp. 121-126.

This paper provides empirical evidence concerning the way organizations budget for information security expenditures. The findings from this study indicate that economic concepts, such as NPV and cost-benefit analysis, are beginning to gain acceptance from senior information security managers in budgeting for information security expenditures.

• Gordon, L. A., M. P. Loeb, T. Sohail, C-Y Tseng, and L. Zhou, “Cybersecurity, Capital Allocations and Management Control Systems,” European Accounting Review (forthcoming)

Drawing on and extending the extant agency-based capital budgeting literature, this paper demonstrates the relevance of the study of management accounting controls to problems arising in the cybersecurity setting. The main finding is that firms can use an information security audit (which is an integral part of a management control system) along with adjustments to the compensation payments to the agent and the investment decision rules, to mitigate a Chief Information Security Officer’s inherent empire building preferences. The paper also identifies additional research areas where management accountants with expertise in management control systems can contribute to the academic literature and practice surrounding cybersecurity issues.