1. Executive Director’s Report Kevin Arnold Executive Director

2. To provide a brief update on major developments and Strategic Plan Implementation since November 2010.

3. Scope Start Point & Stats

6. Annual Conference: Dubai Very successful conference with: 206 Delegates 96 accompanying guests 71 countries represented

8. Annual Conference: Paris Biggest conference attendance in Nexia’s history with: 235 Delegates 105 accompanying guests 67 countries represented

10. Scope Scale of our Network

11. Organisational & Financial Growth 2011 2011 Fee Income: US$2.33bn +12% 548 Offices -5.5% 2,308 Partners +1.2% 21,000 + Total Staff +5%

12. Financial Performance: 2009 - 2011

13. Major Developments 2011 Amalgamation of Europe Middle East & Africa Forum of Firms Trial of new Annual conference structure EU Green Paper Strategic Plan Implementation

14. Amalgamation of Europe + Middle East & Africa regions Consistent with international structure of peer organisations, networks & associations. Enables Nexia to strengthen resources/capacity of Middle East & Africa firms through access to European resources on quality/training & education and marketing. Continue to maintain regional identity of Europe/Middle East/African groups within larger structure. No fee increase planned. Board approval in principle. Decision taken at November Council meeting.

15. Amalgamation of Europe + Middle East & Africa regions - Update Re-shaping of EMEA Board MENA (sub-region) meeting – January 2011 in Amman (Jordan) Sub-Saharan (sub-region) meeting – Feb 2011 in Centurion (South Africa)

16. Major Developments 2011 Forum of Firms

17. Extensive debate and members views surveyed US$64,000 annual contribution Membership application accepted-effective from October 2011

18. The objective of the Forum of Firms (Forum) is to promote consistent and high quality standards of financial reporting and auditing practices worldwide. The Forum brings together firms that perform transnational audits and involves them more closely with the activities of the International Federation of Accountants (IFAC) in audit and other assurance-related areas. Objective

19. Full Members ISAs IESBA Code of Ethics ISQC 1 Globally coordinated internal QA reviews Report annual compliance Dues FoF Membership Obligations

20. Baker Tilly International BDO Constantin Associates Network Crowe Horwath International Deloitte Touche Tohmatsu Limited Ernst & Young Global Limited Grant Thornton International Ltd HLB International IECnet INPACT Audit Limited JHI JPA International KPMG International Cooperative Kreston International Mazars Moore Stephens International Limited Nexia International PKF International Limited PricewaterhouseCoopers International RSM International Limited Russell Bedford International SMS Latinoamérica Talal Abu Ghazaleh & Co. International UHY International Limited FoF Full Members (24)

22. Major Developments 2011 Members’ comments in Dubai led to trial of new Annual conference structure

23. Major Developments 2011 Trial of new Annual conference structure. Purpose: reduce time out of office. Reduce costs without impacting on quality of conference. Net result is a loss of half a day conference time.

24. 2012 Conference Format Annual Conference Washington: 17 – 20 October: –Wed 17 th : Committees Meeting –Thurs 18 th : Audit Forum/ Board Meeting/Welcome Reception –Fri 19 th : Conference Day 1 –Sat 20 th : Conference Day 2/Gala Dinner

25. 2012 Conference Programme: Regional Conferences

27. EU Green Paper Potential significance to Nexia Working Group established – to be broadened Board meeting January 2012 to review findings

28. Major Developments 2011 Strategic Plan Implementation Update

29. Ambitious-Now Comes the Hard Bit! “Been tried before-won’t work”. Note use of the word: “Consider”; need your support. No plan survives contact. Let’s just do it!

30. Strategic Plan Implementation Update So, how have we done?

31. Consists of: Mission Statement. Vision Statement. 7 Strategic Objectives. 49 Tasks.

32. Underpinning Themes-The Bench Mark Questions Help members grow their business-organic growth. Increase international referrals. Improve members’ benefits-the reasons for joining- and staying.

33. Strategic Objective: 1 Encourage members to develop an international focus to their practice and provide them with appropriate resources to apply a consistent Nexia approach to cross border engagements.

34. Tasks Provide guidance to Members in developing …..international dimensions to their practice and leveraging the Nexia brand in their marketplace.

35. Nexia Collaboration: –Nexia Nordic –Central & Eastern Europe Already Completed

36. Tasks Develop a portfolio of marketing resources, templates and guidelines that enable Members to implement consistent Nexia brand messaging on cross border engagements and answer the question: “Why Nexia?”

37. Already Completed Increased Marketing Committee Output: –Mobile Application. (over 4,000 downloads) –Re-designed Web Site –E news letter-Nexia Global Insight –Bespoke Market reports –International Marketing Plan Template for members –Corporate video

39. Strategic Objective: 3 Ensure that Nexia maintains a strong presence in key strategic markets and identify opportunities to extend and enhance international coverage where appropriate

40. RankNetworkFee income ($m) 1Deloitte26,578.00 2PwC26,569.00 3E&Y21,550.00 4KPMG20,630.00 5BDO5,283.60 6RSM International3,878.90 7Grant Thornton3,673.00 8Baker Tilly3,065.80 9Crowe Horwath2,729.00 10PKF2,449.40 11Moore Stephens2,151.10 12Nexia2,101.00 13HLB1,692.00 14Kreston1,673.00 15Mazars1,185.60 16UHY648.40 17Russell Bedford376.00 18ECOVIS258.60 19IECnet/CPA-USA/EPR119.10 20Reanda International61.50 21SMS Latinoamerica53.70 22UC&CS America24.90 Network Positioning

41. CountryPosition Australia15th China10th Japan11th South Korea7th France14th Germany6th Italy17th Netherlands10th Poland19th Russia10th South Africa12th Spain11th Turkey1st* UK7th Canada14th Mexico7th U.S.A.17th Brazil14th Nexia Firms National Positioning

42. Regional Composition: 2011

43. Scope Improving Presence

44. More aggressive-proactive approach needed

45. Membership Gains 2011 Brazil Luxembourg Nicaragua Italy Philippines Botswana Switzerland

46. Membership Gains 2011 Togo Angola Australia

47. Tasks Direct particular member firms to target cities in which there is a need for a member, making them responsible for recruiting there. If necessary, being prepared to fund selective recruitment.

48. Strategic Objective: 4 Raise the level of confidence between members by benchmarking and monitoring required standards of performance in relation to membership obligations.

49. Tasks Develop, implement and maintain a system for monitoring and reporting member compliance.

50. Obligations of Membership Category One: Failure to comply will lead to Board review. Each case considered on merit but the board retains the right to expel the firm from membership. Category Two: Important but do not impact upon other Member Firms to the same degree as Category One.

51. Data base established and performance record reviewed regularly by Executive Director and Regional Chairs. Performance record reviewed each year by Board of Directors, regular non-compliance could lead to expulsion. Non Compliant Firm Procedure

52. Member Firm CATEGORY 1 OBLIGATIONSCAT. 2 OBLIGATIONS Payment of Fees Amount of Debt QCR Acceptance Annual Survey Membership Criteria Effective Communication Complaints Regional Conference Annual Conference Web Site & Stationery Web Site Directory Input to Nexia Publications Total Score xxxxxxxxxxxxxxxxx 3 33 3 33 3 17 xxxxxxxxxxxxxxxxx 3 33 3 33 3 17 xxxxxxxxxxxxxxxxx 7,834.92 3333 33 13 xxxxxxxxxxxxxxxxx 3 23333-2 11 xxxxxxxxxxxxxxxxx 3 2333 -23 11 xxxxxxxxxxxxxxxxx 3 3233 -23 11 xxxxxxxxxxxxxxxxx 3 32333 -2 11 xxxxxxxxxxxxxxxxx 3 3 33 3 9 xxxxxxxxxxxxxxxxx 3 3 3 3 3 9 xxxxxxxxxxxxxxxxx 2,678 2 3 33 3 8 xxxxxxxxxxxxxxxxx 3 32 3 3 8 xxxxxxxxxxxxxxxxx 3 32 3 3 8 xxxxxxxxxxxxxxxxx 3 2 3 3 3 8 xxxxxxxxxxxxxxxxx 2,582 233 33 8 xxxxxxxxxxxxxxxxx 3 233 3 8 xxxxxxxxxxxxxxxxx 3,008 3233 3 8 xxxxxxxxxxxxxxxxx 3,711.00 33 333-2 8 xxxxxxxxxxxxxxxxx 3 32 3 -23 7 xxxxxxxxxxxxxxxxx 3 233 -23 7 xxxxxxxxxxxxxxxxx 18,847.01 33 3 3 5 xxxxxxxxxxxxxxxxx 2,000 32 3 3 4 xxxxxxxxxxxxxxxxx 2,006 32 3 3 4 xxxxxxxxxxxxxxxxx 2,000 3233 -2 3

53. Why is it important? Defines quality in broader sense. Objective basis to terminate membership. Sends a message from the board. Develops confidence between members.

54. Purpose: –Encourage –Raise quality –Confidence Building between Member firms to increase referrals. Non Compliant Firm Procedure

56. Tasks Ensure that there is a rigorous set of procedures and guidelines governing Nexia’s internal operations and its interaction with Members.

57. Greater transparency. Approved by Board of Directors. Form the basis of our Compliance requirements. Nexia Operating Procedures

58. Criteria for Membership. Responsibilities of Contact Partners. International referral work between firms. Obligations of Membership. Expenses Policy. Un-Budgeted Expenditure. Role & Constitution of Umbrella Groups. Meritorious Service award. Firm of the Year award. Already Completed

59. Meritorious Service –….normally given to an individual nearing the end of long service…. –….qualifying period has been significant, but that the achievements during that service merit special recognition. Awards

60. Firm of the Year –A pro-active ambassador and champion for Nexia International within their national or international markets. –Willingness to collaborate/share ideas and expertise with other members…. –Participation/leadership on Nexia committees/interest groups. –Submission of material/articles which can benefit member firms or the network. Awards

61. Firm of the Year –Attendance and active participation at Nexia conferences/meetings. –Participation in other ad hoc Nexia activities. Awards

62. Firm of the Year –Attendance and active participation at Nexia conferences/meetings. –Participation in other ad hoc Nexia activities. –A winning firm is not eligible to compete in the two following years

63. Tasks Support the development of specialist groups….

64. Specialist groups Business Advisory Group. Global Tax Group. Private Wealth Group. IT & Internal Services Group (?) Lawyers Group(?)

65. Specialist groups Great opportunity to increase business. Need support. Global organisations best developed from bottom up.

66. Tasks Develop a Charter for Umbrella Groups which would outline the Board’s expectations. –Done Hold a centrally funded Umbrella Chairmen’s meeting at least once every two years. –Meeting to be held in London 14 – 16 March 2012

67. Strategic Objective: 6 Encourage referral business flows across the network and support collaboration between members.

68. Cross Border Data Base Working Group Members: Ian Stone (Nexia Court Australia) Chris Appleton (Smith &Williamson UK) Dan Vanderberg (Rehmann USA) Purpose: To identify potential subsidiary clients. Protocol developed. Asia Pacific pilot trial. Great potential.

70. Strategic Objective: 7 Encourage greater knowledge sharing opportunities amongst Members through the continued development of international technical committees, specialist interest groups and technical training initiatives.

71. Tasks Create an International Education, Training and Secondment Committee in order to develop and coordinate the ‘softer’ benefits of membership.

72. Now Nexia International People Development Team. People Development Framework. New Manager & Senior Manager Courses. New Partner Course. IFRS Training. Secondments-Publicise and Evaluate. People Development Brochure. International Training & Secondments Committee - Output

73. Tasks Consider the creation of an IFRS Help Desk.

74. Tasks Consider the creation of an IFRS Help Desk. IFRS Initiative-Christian Fuchs-Ebner Stolz

75. Tasks Consider and review the level of secretariat support required to facilitate and improve greater knowledge sharing and specialist committee delivery.

76. Welcome Mike Adams Nexia International’s Tax Director

77. Strategic Plan – Some Realities Full time employees: Crowe Howarth (No 9): 25 PKF(No 11): 20 HLB (No 12): 22 DFK (No 20): 14 Nexia – 10. (International plus Europe & Australia)

78. Strategic Plan Implementation Update So, how have we done?

79. Strategic Plan Implementation Update Achieved much but must maintain the momentum.

81. Any Questions?