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AIN1501 EXAM PREPARATION NOTES
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AIN1501EXAM PREP NOTES PACK
,Study Unit 1 - Information
1. Introduction – page 4
This chapter discusses the term “information”.
We are living in an information era (i.e. information economy). Information systems are changing the way in which
companies conduct their activities.
Business involves the processing and exchange of information. Therefore, data/ information can be considered as a
valuable asset.
The aim behind knowledge is essentially to create competitive companies, manage global markets, add business value,
and provide useful products and services to customers.
Acknowledging the potential of information systems and having the ability to put this knowledge to work can not only
result in a successful personal career, but can also contribute to companies reaching their goals and for people to maintain
a high quality of life.
You must examine :
● different forms of information,
● the way information is produced through different systems
● and the reason why businesses needs information.
Inputs relate to information being supplied into the system
Output relates in information supplied out of the system.
2. What is information – page 4
Numbers and letters - can be tangible such as printed material
- can be non tangible such as digital data
Audio and video - sound / graphics on digital recordings
And it must relate to - facts
- events
- transactions
© 2014 Edge Business School , a South African company. All rights reserved. 2
,- Define the terms Data and Information
Study Guide Reference - page 4 and page 5 – point 2
Data is the raw material available for processing into information
Information is a set of facts or data organised and processed in such a way that it provides additional value beyond that
of the facts themselves
- Name the 5 elements of Creation of Information
Study Guide Reference - page 5 – Figure 1.1
Activity
Data
Information
Knowledge
Decision making
- Name and explain 3 characteristics of information
Study Guide Reference - page 5 and page 6 – point 2
Characteristic Explanation
Accurate Information should be without errors.
Accessible Information should be easily available to users in order to meet their
needs.
Up to Date information Information needs to include the latest possible information and
recording time of data should be minimised.
Detail information Some users may need details of all events while others need a summary.
Information should contain all the important facts, but no more than
are necessary.
Flexibility Information is flexible if it is usable for more than one purpose.
Relevance of information Information should be relevant to the needs of the users.
Cost Effectiveness The value of information should always be balanced with the cost of
producing the information
Reliability Information is reliable if one can depend on it.
Timely Information should be delivered when it is needed
Format of information Information should not be overly complex and should be supplied in
the required format.
© 2014 Edge Business School , a South African company. All rights reserved. 3
, The uses and users can be illustrated as follows :
3.1 Internal Users – page 6
- Name 4 examples of internals users of information
Study Guide Reference - page 7 – point 3.1
Management
Financial Managers
Production Managers
Staff Managers
Marketing Managers
Sales Managers
Purchase Managers
Employees
- Name 4 examples of external users of information
Study Guide Reference - page 7 – point 3.2
Shareholders
Suppliers
Customers
Financial Institutions
Government
Possible Future Employees
Shareholders – Shareholders require information in order to make decisions whether to keep their investment or not
based on past and present performance of the company with reference to the financial statements.
Government – SARS requires financial statements to calculate the company’s tax liability and to determine whether
VAT has been calculated correctly. Other information such as salaries is needed to determine personal tax deductible by
the company.
Financial institutions – Financial institutions require information to determine whether additional financing may be
given to the company and whether debt can be paid.
© 2014 Edge Business School , a South African company. All rights reserved. 4
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