Investments in cybersecurity are critical to the national and economic security\nof a nation. There is, however, a strong tendency for firms in the private sector\nto underinvest in cybersecurity activities. This paper reports the results of\na survey designed to empirically assess whether treating cybersecurity as an\nimportant component of a firm�s internal control system for financial reporting\npurposes serves as a driver for private sector firms to invest in cybersecurity\nactivities. The findings, in this regard, are significantly positive. The study\nalso shows that a firm�s concern over the risk of incurring a large loss due to a\ncybersecurity breach and the degree the firm treats cybersecurity investments\nas generating a competitive advantage are drivers of the level of private sector\ninvestment in cybersecurity activities. The implications of the empirical results\nfor designing public policies to mitigate the tendency of private sector\nfirms to underinvest in cybersecurity are also explored.
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