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Irregularities or frauds do not only occur in the trust operations of a financial intermediary, there are also frauds involving the fixed assets and some of these frauds are:

Fictitious entries to the book of furniture, fixtures and other property owned or acquired. The concealment of embezzlements through fictitious entries to the book of furniture, fixtures and other property owned or acquired, although not frequent, is achieved by increasing the value of the fixed assets, by issuing a cashier’s check or manager’s check for the amount and will be cashed later on.  This strategy, however, are seldom used because it is easy to detect.  Examination and verification of any increases in these assets will act as a deterrent to the manipulation of these accounts.

Embezzlement of income from rental.  Embezzlement of rental income is the method frequently resorted to in real estate operations to defraud financial intermediaries.  In the absence of control, it is necessary to determine, on a definite date, the total rental income to be accounted for, covering all properties at the beginning of the specific period together with the determination of all rentals in default, segregated as to delinquent and uncollectible.

Personal inspection at periodic intervals should be made to check if properties owned by financial intermediaries are occupied and/or rented.  Inspection of lease agreements and checking when against the tenant’s record will help in the control of income and improper adjustments or rentals.  Verification statements should be sent out to delinquent renters.  Rentals written-off as uncollectible should be thoroughly investigated.

Padding of expenditures for repairs, alterations and improvements. There are instances where payments were made for unnecessary or non-existent expenses and charged to operating costs of real estate.  Repairs, alterations, and improvements over a certain amount should be inspected by someone in the organization who is familiar with this type of work and who could check the cost to prevent the padding of expenditures.

Other irregularities are overpricing in the acquisition of fixed assets, unauthorized charge-off of fixed assets, misappropriation of the proceeds from sale of fixed assets and unauthorized use of fixed assets for the personal benefit of an officer or employee.

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A successful local bank adapted a suggestion system which they concluded to be effective. The employees were encouraged to submit their ideas like on how to develop or improve its banking services or on how to save cost expenditures and other recommendations related to banking.
The suggestions came from different departments but more came from employees directly in contact with bank customers. Aside from the monthly suggestion system winner, there is also the annual winner who was chosen to be the best among the best winners. All winners are given rewards and recognitions and are featured on the bank’s bulletin or circular

Keeping employees’ involvement at the suggestion level should be part of management policy. Input and final implementation are the employees’ jobs; decision-making and analysis of any new proposals rests with the executive committee,

To get the suggestion system more effective, the following must be applied:

1. Encourage employees to formalize their suggestions. These are the ideas that came from their years of experience in a particular job.
2. Maintain a strict policy on the qualities of the suggestions. Emphasize that recommendations should be specific and the problem involved is clearly defined.
3. All qualified suggestions will be thoroughly screened and evaluated by a committee before the best suggestion is presented and approved by higher management for implementation.
4. The employee with the best suggestion should be publicly recognized or rewarded to inspire others to follow suit.

It is important to note that participation caries its own rewards for employees. Being asked to make suggestions, getting a little attention and receiving even a simple “thank you” from management are all motivators that usually result in improved productivity.

A marketing manager was hired by a commercial bank located at the heart of a financial hub. The manager was given the task to create new systems and procedures and submit for management approval and implementation. The initial action done was to observe the front line operations in the branches as well as in the head office.

In due time, the manager submitted the evaluation report and recommendation for the following:

The manager did not expect that top executives will agree with all the recommendations. There were those who commented that it might not work. While the others, reacted about the expected expenditures for the projects.

The following were highlighted by the manager for the approval of the above projects.

1. Since there were those who are troubled in accepting the idea, the benefits were illustrated with examples based from previous experiences.
2. People initially respond to the demand for change by sorting out blame for the original problem. The job done by the manager was to focus the discussion on what’s wrong and how to fix it; not who’s wrong.
3. Through persistence. When the message is repeated over and over again, it eventually gets through.

Finally, all projects were approved by top management and successfully implemented.

The benefits being in the forefront of a movement for change carries with it a deep sense of satisfaction from knowing that someone has contributed something for a better organization.

If there are many who are dreaming in having his or her own business for so many good reasons, yet there are also a lot who wants to stay as an employee. They also have some good reasons in which are reasonable too.

What are the common advantages of being an employee? Well there are also many good sides in staying as a worker rather than being a freelancer. Some of them are the following:

1. Regular income, if you are working, you will expect a regular salary. You do not have to worry much in expenditures for you will be expecting an income in a regular basis the only matter is how you will use them wisely.
2. Government benefits, in regular situation the company owner will pay your share of governmental mandatory contribution, thus you do not have to worry in paying them monthly to get your benefits in the future.
3. A chance to mingle different persons, if you are employing you will have a time to meet and be friends with your co-workers. This will help you to light-up your social life and ease boredom in the office environment.
4. Non-stop learning, meeting different personnel with different talents or skills will help you endure in learning process. You will train by your superiors that made you skillful in whatever field you are taking.

Business is composing of various elements. It is not just that you build an organization you must also focus to different aspects to the actual operations of one business. The factors to the business operations are marketing, operations, purchasing, accounting which involves the budgeting and many more.

Today, this article will discuss the capital budgeting. The capital budgeting defined as the designed method used to make a conclusion if the investments of an organization is worth to work at. The usual investments are equipments, research projects, marketing strategies such as advertising and promotion, properties and the likes. Investments are the company expenditures that executives will look for as a future cash flow or will generate income.

Capital budgeting is an important factor to consider and needs to plan carefully. If one organization do not consider capital budgeting and continue to expend for their investment that business, even if it carries good products or services, will surely not stay in the industry. Wise expending is one reason why the business establishments survive.

Since capital budgeting is very important to the business, executives designed some techniques for the better planning such as: Net present value, Accounting rate return, Profitable index, Equivalent annuity and many more. Those methods are effective, only if it applied in a good process and has planned carefully.

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