What does successful cross border work look like? Chris Appleton - Smith & Williamson (UK) Jennifer Leary - CLA (USA) Torsten Janßen - Ebner Stolz (Germany) Dal Cheema - Nexia International Chris/Dal

a new trend in international work Introduction a new trend in international work relating to large multi-national groups case studies what we have learnt areas to consider Torsten

A new trend in international work The trend and what is driving it the international groups are retaining their Big 4 auditor for Group reporting purposes but putting out to tender, blocks of subsidiaries (regional or national basis) drivers at Group CFO and Audit Committee level excessive fees being charged by Big 4 poor service levels at regional and local subsidiary level both the above factors play to our strengths Chris

A new trend in international work trend over the last 10 years - Big 4 consolidation, sweeping up all the subsidiary audits in their client groups impact on Nexia firms - a constant threat and steady loss of work three recent developments with invitations to Nexia firms. Jennifer

Key case study - Dekra Dekra background group turnover US$1.86 billion Ebner Stolz has a close relationship with the client through prior due diligence work UK FD was a strong supporter of Smith & Williamson opportunity multiple auditors in USA and UK desire to consolidate audit provision and tax EY fees seen as too high competitive tender with EY and KPMG Chris/Torsten

Key case study - Dekra Dekra solution – Nexia offered single point of contact between Dekra and Nexia firms significant fee savings innovation on audit coverage demonstration of how we would provide a local service result we were the most proactive team during the proposal Dekra HQ knew and valued the work from Ebner Stolz and Smith & Williamson Chris/Torsten

Key case study - Dekra Dekra CLA and CohnReznick appointed in the USA, Smith & Williamson in UK and Nexia Friedman will get the work in Canada next year fees audit only work: US$140,000 (USA) and £40,000 (UK) tax: all additional. Chris/Torsten

Key case study - Eastman Chemicals background group turnover US$9.4 billion large multi-national based in the USA OUS Statutory Audits performed by Group Auditor, PWC, for years challenge fees and service level had diminished in various countries competition for tender: other top 10 networks Jennifer

Key case study - Eastman Chemicals solution/value global solution with the full coordination of 16 countries through the network Nexia was noted to be #1 in capabilities, talent and chemistry; #3 in fees ultimately lost due to fees; other network clearly “bought” the work. Jennifer

What we have learnt a new trend in audit selection for multi-nationals our Nexia offering plays to the client needs as we identify: more cost effective pricing better service levels we have strong credentials and the Big 4 are happy to rely on our audit work in a group context – regardless of what they may say to an individual client we have demonstrated that Nexia members have the desire and ability to work quickly, coherently and co-operatively together. Torsten

having a lead partner/lead firm on such tender work is best Areas to consider having a lead partner/lead firm on such tender work is best pricing continues to be competitive building good relationships with large companies yields benefits in the tender process need to utilize Nexia tools for “common branding” share opportunities with Secretariat for tracking and assistance Chris and Jennifer Identify the three issues which you have had with international proposals: - consistent branding – use of Nexia as the key brand in the proposal. DC to talk about the Nexia proposal template - organisational chart showing inconsistent photos – DC to talk about the “People finder” functionality - fees

proposal guidance and templates Areas to consider Nexia tools proposal guidance and templates Describing Nexia International guidelines Nexia placemat Tender alert system case studies/credentials member firm fact sheets and the “People finder” functionality Coming soon International roles and responsibilities document Corporate design guidelines. Dal Mention the use of tender alerts and proposal guidance for the Siemens Industry Software opportunity (co-ordinated by Nexia TS in Asia pacific)

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