Data and Information
Data and Information
Data and Information
Data are raw facts, events, numbers and transactions, which have been collected, recorded,
stored but are not yet processed. Data consist of numbers and characters (i.e. alphabets and special
symbols) which are used to record facts and events about activities occurring in an environment.
Information is processed data. It is obtained after subjecting data to a series of processing operations
which convert related groups of data (raw facts) into a meaningful and coherent form. Processing
could be in the form of addition, subtracting, comparison, sorting, rearrangement etc. This makes
information useful and meaningful. In other words, information could be defined as the desired form to
which data is finally transformed after undergoing a series of processing.
Let us consider an example which distinguishes data from information. The costs of five different items
are data while the total cost or average cost which is obtained from the different costs is information.
Information must be communicated and received by a manager who uses it for decision making. On
most occasions, what is information to one manager might be data needing further processing to
another manager.
We should know that the main reason why people muddle both terms: data and information is because
they are both dynamic in their state. That is, data used as input for a computational process may be an
output of an earlier computation performed on the same computer and vice versa.
The Table below shows example of data being used as information and vice versa.
If we study the Table above, we shall realise that information (output), for a particular computational
stage serves as input for the next operation. For example, the information (set of characters like Ade,
70, Sola etc) is what will be used as data input in the second operation (Computation of a class average
score in computer science), and the same logic is applicable to the third operation.
The table below gives some distinctions between data and information
2 It serves as input into the computer system It serves as an output from the computer
system
3 Observation and recording are done to produce Analysis of data are done to obtain
data information
4 Data is the lowest level of knowledge Information is the second level of knowledge
Types of Information
Information needs of an organization can either be quantitative or qualitative
a. Quantitative Information: Quantitative information deals with the magnitudes of variables, their
variability or absolute values. Some examples are Annual sales of a production company, Variation
in the wages of low-level staff in an organization, Prices of goods; and Number of hours worked on a
production line.
b. Qualitative Information: Qualitative information is related to the attributes of an entity in respect
of quality factors. This type of information is not exact (precise) in nature but it is very useful for
comparative measurement. Examples include standard of finished product in respect of paintwork
or electroplating; and Variation of tolerances of manufactured parts i.e. deviation from standard
dimensions.
Information System
With the proper definitions of data, information and the attributes of information given above, we can
now define an Information System as distinct from information. An Information System is the set of
interconnected procedures, the purpose of which is to provide managers at all levels and in all functions
of an organization with the information necessary to enable them make timely and effective decisions.
Information Systems can also be defined as a combination or collection of people, hardware, software,
communication networks and data resources that collects, transform and provides information to
managers at all levels in all functions to allow timely and effective decision making in an organisation.
These decisions are for:
i. Planning,
ii. Directing, and
iii. Controlling of all activities for which they are responsible
The AIS differs from other information systems in its focus on accountability and control.
a. The Expenditure subsystem/cycle which consists of the activities involved in buying and paying for
goods or services used by the organisation;
b. The production subsystem/cycle which consists of the activities involved in converting raw
materials and labour into finished products (only manufacturing organisations have production
subsystem);
c. The Human Resources/payroll subsystem/cycle which consists of the activities involved in hiring
and paying employees;
d. The Revenue subsystem/cycle which consists of the activities involved in selling goods or
services and collecting payment for those sales; and
e. The Financing subsystem/cycle which consists of those activities involved in obtaining the
necessary funds to run the organisation and in repaying creditors and distributing profits to
investors.
The above basic subsystems suggest the most important work activities performed by
Professional Accountants. Some of these include:
i. Ease Of Fraud: Information System makes whoever uses it efficient. This implies that if fraudsters
have access to information systems, it will make their fraudulent activities efficient too.
ii. Data Loss: If there is a disaster and an organisation fails to back-up her data regularly, the
information she has may be lost and this can lead to legal liability and may eventually lead to the
collapse of an organisation.
iii. GIGO Effect: The popular term GIGO (Garbage-in Garbage-Out) implies that whatever you feed into
the system is what you get. This becomes a disadvantage if wrong data is fed into the system, as it
will produce wrong information that may ultimately lead to wrong decision making in businesses.
iv. Information can be deceptive sometimes, e.g. statistical information, if not well explained, which
can lead to wrong use.