CA INTERMEDIATE

SUBJECT- EIS AND S.M.

Test Code – INP 3135
(Date :)
(Marks – 100)
TOPIC : FULL COURSE

(Time allowed – 3 hours)

Section A - ENTERPRISE INFORMATION SYSTEMS

OBJECTIVE QUESTION :

M/s TAS & Sons is an automobile manufacturer of spare parts of four wheelers in India.
The company has four manufacturing units in various locations across the country. It also
has two branch offices located in Pune and Hyderabad to handle activities like orders,
delivery, complaints and stock operations. The company maintains its account with ABC
Bank from where it also has taken various loans and advances.
Sometime ago, the company’s business processes like accounting, purchase, sales and
inventory were maintained in manual mode. The management of the company observed
that the manual processing of these activities hinder the overall working of the business
related daily operations. This resulted in huge gap in the flow of information, pending
orders, delayed deliveries, and delayed decision making due to lack of business reports and
therefore overall non-performance. Thus, the management committee decides to adopt the
process of automation for its various business operations so that information flow would be
timely and consolidated within its branches and manufacturing units. To attain this
objective, the service models of Cloud Computing are proposed to be adopted so that the
branches and manufacturing units are interconnected with centralized mechanism of data
sharing and storage. The proposed system with well- implemented access controls will
provide robust data security among its systems of branches and manufacturing units. Not
only the record keeping, but also data maintenance and reports generation would become
simpler after the implementation of proposed system. The management is also looking for
better prospects of adhering to the legal compliances of the country and also to initiate its
business operations through online mode.
Subsequently, the company hires a consultant Mr. Sumit to carry out the feasibility study of
its proposed system who prepares a feasibility report and submits to the management.
Based on the go ahead report of Mr. Sumit’s report, a project team is scheduled to be
constituted who will work under him to execute the project and ensure its delivery on time.
1. The Management committee of M/s TAS & Sons decides to automate its entire
business processes anticipating reaping better benefits for the company. Which of the
following does not come under the category of benefits of Automation?
(a) Consistency of automated processes
(b) Automating Redundant processes
(c) Reduction of turnaround time
(d) Better utilization of employees’ time
 2. In purview of above case scenario, the management of M/s TAS & Sons decides to
adopt the process of automation for its various business processes so that information
flow within its units and branches would be timely and consolidated. The data is
centralized and in case of loss of any set of data from this location, whole business
may come to stand still. Identify from the following controls that may be useful to
overcome the aforementioned risk.
(a) It can be controlled by removing redundant data.
(b) Back up arrangement needs to be strong.
(c) To allocate some funds in case of contingencies.
(d) Overhauling of organizational structure is required.
3. If the company hires XYZ Ltd. as its Cloud Computing service provider, which of the
following model of Cloud Computing would be useful for M/s TAS & Sons if XYZ Ltd.
proposes to host company’s application at its data center over the internet to make it
accessible to the customers of M/s TAS & Sons?
(a) Infrastructure as a Service
(b) Platform as a Service
(c) Software as a Service
(d) Database as a Service
4. In purview of the above case scenario, the company decides to install various
internetwork processors like routers and firewalls etc. for its business application
through online mode in order to make its whole network secure. Which type of
control the company is planning to work on?
(a) Corrective Control
(b) Preventive Control
(c) Network Control
(d) Detective Control
5. M/s TAS & Sons maintains its account in ABC Bank which faces the application risk of
incorrect classification and provisioning of Non Performing Asset (NPA) resulting in
financial mismanagement, of company’s account. Which control would be best
suggested to take care of this?
(a) Access for changes made to the configuration, parameter settings should be
restricted to authorized user.
(b) Unique Id should be created for each asset.
(c) The system parameters need to be set up as per business process rules of the
bank.
(d) To ensure existence of configuration/customization in the application to perform
NPA classification as per relevant RBI guidelines.

(5  2 MARKS = 10)
2. Though stringent controls are implemented by SciLabs, one of its development team
member Mr. Atul accesses the confidential architectural diagrams of the new project
 and download them on his personal computer for wrongful reasons. Under which
Section of the Information Technology Act, 2000; is Mr. Atul punishable?
(a) Section 65
(b) Section 43
(c) Section 66
(d) Section 66D (1 MARK)
3. A huge oil spilled from an oil well run by British Petroleum, one of largest oil
companies in world, and resulted in an assessed environmental damage of about USD
20 Billion. The company expanded an amount of USD 2 Billion on promotional ads
informing the world that it is an environment friendly company. The promotional ads
were done to prevent company from which damage?
(a) Strategic
(b) Operational
(c) Financial
(d) Reputational (1 MARK)
4. Identify the false statement from the following statements on various modules of ERP.
(a) Controlling Module evaluates the profit or loss of individuals.
(b) Sales and Distribution Module includes product enquiries, placing order and
scheduling activities.
(c) Plant Maintenance Module involves the process of planning the
production activities.
(d) Human Resource Module deals with financial entries like advances or loan
to employees. (1 MARK)
5. XYZ Ltd. provides Data Processing services to its clients. It has received a big contract
from DEF Insurance Company for its data processing. With limited PCs at its office,
XYZ Ltd. approached Amazon Web Services to hire and access Virtual Machines for
data processing on pay-as per usage concept. Which Cloud Computing Service Model is
being used by XYZ Ltd.?
(a) Software as a Service (SaaS)
(b) Platform as a Service (PaaS)
(c) Infrastructure as a Service (IaaS)
(d) Network as a Service (NaaS) (1 MARK)
6. In both branches of ABC bank, all the fixed asset acquisitions will be recorded as the
control objective related to certain risk. Under which category this control
objective falls?
(a) Configuration general ledger
(b) Transaction Fixed asset
(c) Master fixed asset
(d) Transaction general ledger (1 MARK)
 Question 1 is compulsory
Answer any three out of Rest
QUESTION : 1
(A) How do you protect your e-commerce business from intrusion.
(3 MARKS)
(B) Define Proxy Server.
(2 MARKS)

QUESTION : 2
(A) ABC university wants to conduct online exams for its different courses for which a
contract is given to vendor XYZ. The vendor provides computing resources such as
processing power, memory, storage, and networks to ABC university users to run
their online exam application on-demand. Identify the Service Model of Cloud
Computing that vendor XYZ is providing to ABC university and also describe its
characteristics.
(9 MARKS)
(B) Mr. Rajesh, a manager of a medium-sized company’s customer service department,
uses MIS reporting tool to obtain the reports that help him evaluating company’s
businesses’ daily activities or problems that arise, making decisions and tracking
progress. Elaborate the criterions that the information generated through MIS tool
meet so that it is useful to Mr. Rajesh in discharging his role. (6 MARKS)

QUESTION : 3
(A) Draw a Flowchart for the following process:
Leebay is a new e-commerce web site that is setting up business in India. Leebay and
their partner bank Paxis have come up with a joint promotion plan for which the
following offers are proposed. Customers can either login through a mobile app or
directly from the website:
(i) If the payment mode chosen is ‘Paxis Credit’, then a 20% discount is given to
the user.
(ii) If the payment mode chosen is ‘Paxis Debit’, then a 10% discount is given
to the user.
(iii) If other payment modes are used, then no discount is given.
Also, to promote the downloads of its new smart phone app, the company has
decided to give the following offer:
(i) If the purchase mode is ‘Mobile App’, then no surcharge is levied on the
user.
(ii) If any other purchase mode is used, then additional 5% surcharge is levied on
the user. This surcharge is applied on the bill after all necessary discounts
have been applied.
With bill amount, payment mode and purchase mode as inputs, draw a flowchart for
the billing procedure for Leebay.
(6 MARKS)
(B) Discuss the key activities, which require special attention for auditing the user
access provisioning. (4 Marks)
QUESTION : 4
(A) In the Core Banking Systems, the central server supports the entire banking process
through front-end and back-end applications and enables the users to access
numerous online banking facilities 24x7. Explain various Front-end applications of
Core Banking Systems.
(6 MARKS)
(B) With promotion of cashless economy, most of the businesses are using e-commerce
and m-commerce transactions. Enlist any eight commercial laws that are
applicable to these transactions.

(4 MARKS)
QUESTION : 5

(A) As an internal auditor of an organization, Mr. Anil reviews various physical security
controls implemented within his organization. Discuss various activities that he would
perform while doing auditing these physical access controls? (6 MARKS)
(B) (i) What do you understand by Regulatory Compliance? (2 MARKS)

(ii) Write a brief description of three tier architecture of Application Software.

(2 MARKS)

OR

(B)

Mobile Computing is an important and rapidly evolving technology that allows users to
transmit data from remote location to other locations in mobility condition. Being a
communication expert, identify the limitations in current scenario that impede users to use
this technology frequently.

(4 MARKS)
 Section B - STRATEGIC MANAGEMENT

Question 1 and 2 is compulsory

Answer any three out of Rest
1.(A)

Aero Mind Bridge Technologies Ltd (AMBTL) is a software development company work as a
solution provider to airlines industry. The company was established more than a decade ago
by Mr. Pranshu Gupta having experience of working in the United States of America (USA).
His entrepreneurial desires brought him back to India to promote Aero Mind Bridge
Technologies Ltd (AMBTL). The company started its operations with a meager capital of Rs.
10 lakhs with limited workforce. Currently, it enjoys a valuation of more than Rs. 50 crores.
Almost everybody acknowledged the competency of AMBTL in developing customised
software for the airlines industry.
The high growth of the company was mainly on account of the heavy inflows of the funds in
the airlines industry from various big business houses that have diversified into airlines
industry. Currently, these business houses were in the manufacturing of FMCG, textiles,
packaging etc. and having good expertise and uniqueness in these industries.

However, AMBTL saw stagnation in last three years. The order position was shrinking day
by day. The margins were also reducing. Last year was particularly bad for the AMBTL
and its annual sales reduced by 20% for the first time since its inception.
Most of the business houses that had entered in the airlines industry had less
knowledge and experience in the industry. However, their desire to diversify and seeing
new opportunity in the airlines industry prompted them to invest heavily into the industry.

However, things did not turn out to be as expected. The tough competition between several
players, reduction in the fare by railways and high prices of aviation fuel created problems
for the industry. The sector was not able to generate reasonable profits thus resulting
difficulty in maintaining operations. They were in need for hard to come by capital. Lately,
the airlines industry is witnessing some consolidation with companies planning for mergers
or even contemplating closures.

The general global recession also resulted in the reduction of travel expenditure of
corporates resulting in decrease in the order position of AMBTL.

Based on the above case scenario, answer the multiple choicequestions.

1. Identify the nature of diversification by the business houses entering into

airlines industry.
(a) Concentric diversification
(b) Conglomerate diversification
(c) Vertically integrated diversification
(d) Horizontal integrated diversification
2. The big business houses were in the manufacturing of FMCG, textiles,
packaging etc. and having good expertise and uniqueness in these
industries. But they are not performing wellin airlines industry because of
 (a) Non availability of funds
(b) Incompetent workforce
(c) Rapid technological changes
(d) Lacking core competence
3. According to Michael Porter’s model, identify the competitive pressures
faced by airlines industry as per the given scenario.
1. Competitive pressure among rival sellers
2. Competitive pressure from suppliers
3. Competitive pressure from substitute products
4. Competitive pressure from buyers
5. Competitive pressure from new entrants

Select the correct combination in the above scenario:

(a) 1, 2 & 3

(b) 1, 3 & 4

(c) 2, 3 & 5

(d) 1, 4 & 5

4. AMBTL could be easily marked as a Star as per BCG’s Growth Matrix in its
early years. However, the last three years have not been good for
AMBTL. Where would you put it on the BCGMatrix?
(a) Dog
(b) Question mark
(c) Will remain a star
(d) Cash cow
5. Mr. Pranshu Gupta as a core strategist of AMBTL has been authorised to
bring about strategic change in his company, how he will initiate “unfreezing
of the situation”?
(a) Promoting new ideas throughout the organization
(b) Promoting compliance throughout the organization
(c) Promoting change in process throughout the organization
(d) None of the above
(5  1 MARK = 5)
1.(b) ABC is a marketing consultancy business. ABC’s most recent corporate analysis has
identified that three new businesses have recently entered its market and started
aggressively targeting ABC’s key client. As part of ABC’s corporate analysis, these
three new businesses would be a
(a) Strength
(b) Opportunity
 (c) Weakness
(d) Threat (2 MARKS)
1.(C) A famous restaurant enjoys full occupancy during the lunch and dinner time for last
few months. In fact, many customers go back as they have to wait for their turn.
Between 15:00 hours to 18:00 hours, the occupancy rate is near to nil. To raise the
footfalls of customers during this lean time, the owner offers a discount of 20% on
total bill if a customer comes in these 3 hours. Which type of marketing strategy
does the restaurant follow to attract the customers in the lean period?
(a) Differential Marketing
(b) Synchro-marketing
(c) Place Marketing
(d) Concentrated Marketing (2 MARKS)
1.(D) A tool by which management identifies and evaluates the various businesses that
make up a company is termed as:
(a) Value chain analysis
(b) Portfolio analysis
(c) Competition analysis
(d) Strategic analysis (2 MARKS)
1.(E) Sanjivni Pharmaceuticals Limited manufacturers a cough syrup Zenus. It has modified
Zenus syrup, claiming that the Zenus cough syrup is sugar-free, and the consumer
will not feel drowsiness after consuming this cough syrup. Consumers found this
product as unique. The sales of Zenus cough syrup have increased as expected. The
price of this sugar-free syrup is higher by 20% than the earlier syrup. Identify the
strategy adopted by Sanjivni Pharmaceuticals Limited.

(a) Focus strategy

(b) Best cost provider strategy
(c) Differentiation strategy
(d) Cost leadership strategy (2 MARKS)
1.(F) The Niche strategy is the best way to enter a:
(a) New market
(b) Growing market
(c) Matured market
(d) None of the above (1 MARK)
1.(G) Aditya Swaroop is the head of operations of Bindal & Sons private limited. He
is focussing on total or aggregate management functions in the sense of
embracing the integrated activities of a complete department. He assures the
resources are obtained and used effectively and efficiently in the
accomplishment of the organisation’s objectives. He is practicing as: -
(a) Strategic control
 (b) Management control
(c) Administrative control
(d) Operations control (1 MARK)

QUESTION 2 IS COMPULSORY.
ANSWER ANY THREE FROM THE REST
QUESTION : 2
Kamal Sweets Corner, a very popular sweets shop in Ranchi, was facing tough competition
from branded stores of packaged sweets and imported goods. The owners realised that
their business reduced by 50% in the last six months, and this created a stressful
business environment for them. To find a solution, they consulted a business consultant
to help them develop a strategy to fight competition and sustain their century old family
business. The business consultant advised them to innovate a new snack for the public
and market it as a traditional snack of the region. The owners liked the idea and
developed a new snack called Dahi Samosa, which very quickly became popular amongst
the public and it helped regain the lost business of Kamal Sweets Corner.
One of the very crucial importance of strategic management was used by the business
consultant to help the owners of Kamal Sweets Corner. Which one could it be? Also, was
this strategy Reactive or Proactive? According to you who are more beneficial in general
parlance? (5 MARKS)

QUESTION: 3
(A) What is strategic control ? Briefly explain the different types of strategic control ?
(5 MARKS)
(B) How is TOWS Matrix an improvement over the SWOT Analysis? Describe the
construction of TOWS Matrix. (5 MARKS)

QUESTION : 4
(A) Differentiate between Divestment and Liquidation strategy. (5 MARKS)
(B) Core competencies provide edge to a business over its competitors. Discuss. Also,
briefly state the three areas in which major core competencies are identified.
(5 MARKS)
QUESTION : 5
(A) What do you understand by the term marketing mix ? Briefly explain its various
components. (5 MARKS)
(B) Domolo is a premium cycles and cycling equipments brand which targets high
spending customer with a liking for quality and brand name. Their cycles range from
rupees fifteen thousand to rupees one lac. The recent trend of fitness through
cycling has created humongous demand for cycles and peripherals like helmets,
lights, braking systems, fitness applications, etc. The customer base has grown 150%
in the last three months. Mr. Vijay, who is an investor wants to tap in this industry
and bring about cheaper options to people who cannot spend so much. Which
 business level strategy would best suit for Mr. Vijay’s idea and what are the major
sub- strategies that can be implemented to capture maximum market?
(5 MARKS)
QUESTION : 6
(A) Explain the Strategic Alliance. Describe the advantages of Strategic Alliance.
(5 MARKS)
(B) ABC Ltd is a company that has grown eleven times its size in last five years. With
the increase in size the company is facing difficulty in managing things. Many a
times functional level is not in sync with the corporate level. What will you like to
advise to the company and why?
(5 MARKS)