You have been assigned to the audit of F&S Savings and Loan Association. In preparing for the audit, you learn the following about F&S.

Total assets approximate $400 million. F&S has a main office downtown, and 13 branch offices throughout the city. Four hundred people are employed by F&S, with a total payroll of $6 million.

F&S derives revenue from two principle sources, the major source being interest and fee income from loans. According to its articles of incorporation, F&S is restricted to making loans only to customers for purposes such as home mortgages, auto loans, and other personal loans; that is, it cannot make loans to commercial enterprises. The second revenue source is income from investments. F&S invests funds in short-term instruments, such as government securities and certificates of deposit, in order to have a ready source of available funds. Interest earned on investments may or may not be material to earnings, depending on the amount of funds invested during a period.

F&S has two major expenses: administrative costs, such as payroll, building maintenance, utilities, and taxes; and interest paid to depositors. The dollar magnitude of these interest payments varies considerably, depending on current market rates of interest.

Required:

Identify the major business functions and related transaction cycles for F&S Savings and Loan Association.