1. NEXIA INTERNATIONAL AUDIT COMMITTEE REPORT PARIS, 2011 FELIX LOZANO CHAIRMAN

2. - MEMBERSHIP - T&QM - AAQC - NIMo - QCRs - OPERATING PROCEDURES - ROTATION

3. FY 2011 MEMBERSHIP Felix Lozano (Chairman), N&CA, Dallas, United States Michel Girbes (Deputy Chair), EMEA, Amsterdam, The Netherlands George Dakis, AP, Melbourne, Australia Horacio Brihet, SA, Buenos Aires, Argentina Jojo Alviedo, AP, Singapore Svetlana Romanova, EMEA, Moscow, Russia Yvonne Lang, EMEA, London, UK

4. T&QM >>> ASD Mohammed Yaqoob took over from Simon Riley in March 2011 Significant progress made in control and scheduling of QCRs Significant uptake in populating NIMo Operating procedures linked to Nexia strategic oobjectives Development of pool of regional QCR reviewers Limited scope reviews (LSRs) vs. full scope reviews (FSRs) Firm’s to pay for follow-up/advanced QCRs Change in title to AUDIT SUPPORT DIRECTOR (ASD) – to reflect change in emphasis to providing support to firms in improving and maintaining audit quality standards

5. Annual Audit Quality Confirmation (AAQC) survey AAQC survey sent out in August 2011 Poor response rate (approx. 55%) – no trend across regions, firm sizes etc Determination of scope of future QCRs ongoing Difficulty in applying a risk based approach without almost a 100% response rate Firms that have not responded DO still need to do so FSR/ADVANCED QCRs where no responses forthcoming

6. NIMo No data yet on how well populated Wholly reliant on members for complete/accurate input Only addresses non-audit services provided to audit clients Other independence threats (e.g. financial interests) have to be covered manually but need to target relevant member firms and to should avoid sending emails to ALL member firms With IMMEDIATE effect members to input ALL public clients regardless of services provided

7. QCRs FY 2011 – 48 QCRs conducted FY 2012 – 48 QCRs to be scheduled FSRs vs. LSRs Need members’ cooperation and flexibility in agreeing dates (NB – we are ALL busy) Need to spread over November 2011 to July 2012 to ensure reporting completed by end of FY 2012

8. QCRs – pool of local reviewers ASIA PACIFIC George Dakis Percy Italia Jojo Alviedo Aletta Boshoff EMEA Michel Girbes Yvonne Lang Thomas Gotze Annette Lang Moe Cohen Bashier Adam Anton Lewis Susana poyiadjis

9. QCRs – pool of local reviewers N&CA Felix Lozano Grant Block George Qin Alberto Hernandez South America Horacio Brihet Domingos Xavier Teixeira Daniel Abelovich Local reviewers to be trained at regional and annual Conferences – suitably experienced volunteers welcome

10. OPERATING PROCEDURES Drafted Linked to Nexia Strategic Objectives Contain full details of Committee operations and scope/conduct of QCRs Will be put on Nexia website after Board approval at the next meeting

11. FY 2012 ROTATION Svetlana Romanova ceased to be a member w.e.f 31 October 2011 Christian Fuchs (EMEA) and Steven Schenkel (N&CA) appointed w.e.f. 1 November 2011 Yvonne Lang (EMEA) to hand over to Sancho Simmonds (EMEA)

12. Thank you for your attention