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"The official CIBA Strategic Alliance appointment that provides advisory and assurance support services to CIBA members. "

CIBA Advisory Firms Strategic Alliances widens the scope of CIBA firms to support a wide range of clients in all types of industries. These Strategic Alliances do not create a new entity and all parties remain independent, however formal lines of communication, contact persons, and staff resources are allocated to support allied firms operating within the Strategic Alliances.

These Alliances do not practice the profession of public accountancy or provide audit, tax, consulting or other professional services of any type to third parties. This is because the allied firms operating within the Strategic Alliances are independent. The Alliances do not constitute a joint venture, partnership or network between participating firms and because the Alliance firms are independent, services or the quality of services provided are not guaranteed.

Access to resources and wider client reach

  • Description

    Bringing in new clients is a top priority for accounting firms. However you may not have the resources to support a new client and as a result may not accept the new appointment. Similarly a client may ask for a service that your firm cannot provide due to resources contratins, lack of expertise in that area, or a statutory prohibition such as with audits.

    Strategic alliances offer a solution to this problem as they offer you with the ability to provide a wide range of services to your clients.

    They are also a source of cross‐referrals. They provide a place to turn when you cannot accommodate a service because it is too small, too big, or too specialized.

    For all firms, alliances are a way to leverage your existing client base, expand through controlled growth, and provide ways to provide additional services to help your clients. Your firm can grow in size, quality, and profitability, while staying focused on what you do best. Alliances are simply another path to marketing, management, and profitability for your firm.

  • Format

    The CIBA Strategic Alliance innitiative offers members access to specialised services with CIBA overseeing the B2B relationship created between a large audit and advisory practice (LP) and CIBA Small and Medium Practices (SMP).

    Typical alliance structures:

    • Special projects and engagements: Contract with another firm to conduct a particular service directly for your client.
    • Joint ventures: Work with another firm by dividing the scope of work into specific pieces. For example, if your firm doesn’t perform audits, you could subcontract the audit portion of the engagement to an LP. They would have separate engagement letters with the client and render their own invoices.
    • “Just‐in‐Time” consulting: Use the resources of a firm as if they were yours and have the firm bill you, not the client.

*(Source: AICPA: Practice Support Group)

What is required to make this work

  • Defining a strategic alliance

    A strategic alliance* can be described as the cooperative efforts of unrelated firms working together to provide a wide range of products and services to a diverse client base.

  • Strategic alliance vs. Associations

    Strategic alliances should not be confused with accounting associations. Firms in these associations will typically share ideas and resources on issues of practice management and may work in joint venture on specific engagements. They provide members with a strong support system that can help firms compete. They are peer‐to‐peer groups, usually requiring minimum size and service requirements for entry, with members strategically recruited in various geographic regions.

  • Some key things to remember about strategic alliances:
    • They can benefit firms of all sizes working together in the same geographic location.
    • An allied firm could look completely different from your firm, providing products, services, and expertise that your firm lacks.
    • A strategic alliance is a long‐term relationship bringing together firms that have different focuses providing a network of general and specialized experience quickly reacting to a wide variety of client needs.

*(Source: AICPA: Practice Support Group)

Things to do before using the CIBA Strategic Allicance innitiative

The steps to participate in the CIBA Strategic Alliance are as follows:

  • Conduct an analysis of your firm.
  • Define goals and objectives for your firm.
  • Select strategic partners.
  • Engage directly with the LP to determine the scope and nature of the specific services required.

  • Step 1: Conduct an Analysis.
  • The first step in establishing a strategic alliance is to develop a solid understanding of your firm statistics and your client demographics. Basic demographic information is essential to any long‐term plan for establishing a strategic alliance. Always be prepared when discussing your firm, especially with a larger firm. They know their statistics and will ask you yours.

    The SAAA Management of an Accounting Practice Survey (MAP Survey) is a great place to start.

  • Step 2: Define Goals and Objectives.
  • Now that you have become acquainted with the statistical side of your firm, the time for self‐examination is here. You will need to perform a SWOT analysis of your firm, meaning that you should look at the firm’s strengths, weaknesses, opportunities, and threats. The formation of any long‐term plan requires buy‐in from all parties. Involve everyone in the process from partners to administrative staff. Whether you are a sole owner or a partner in a firm, it is critical to know where you are going.

    Only through self‐examination can you decide where you are and where you would like to be.

    Be honest with yourself. Write down your short‐ and long‐term plans. Start a dialog, and make a decision to change.

    The CIBA Guide on Creating a One Page Strategic Plan can help.

    Once you’ve analyzed your firm and defined your goals and objectives, you are now prepared to begin the process of forming strategic alliances to fulfill your goals with a plan in mind.

    An alliance without a plan is just a work‐sharing arrangement that will not benefit both parties involved. If both parties to an alliance do not recognize a benefit, the alliance will fail.

  • Step 3: Select Strategic Partners.
  • Your choice of strategic partners is critical. How do you begin to seek out firms that you can associate with on a long‐term basis?

    One of the best ways is to get involved. Several suggestions for developing your peer network by getting involved were provided earlier. Typically, firms that are actively involved are forward thinkers who may be open to just such an arrangement. You may already be acquainted with these firms and simply need to start a dialog.

    You can impose many criteria in determining which firm will provide the best match for you and your clients. Issues such as billing rates, location, experience, and range of services are all important.

    Nothing, however, is more important than the firm’s philosophy and culture.

    Every practitioner has a personal style that his or her clients are comfortable with. That is why they are your clients. If you are going to directly or indirectly expose your clients (your largest asset) to another CPA firm, you need to be sure they will service your client with the same care and temperament as you. Spend lots of time with the partners and key staff of any firm with whom you choose to form a long‐term alliance.

    What is their firm philosophy? Are they quality people? Do you trust them to be professional with your clients? Will they respect your firm and work collaboratively?

    Think of yourself as the end client and screen them as you would any other professional. Make sure that its goals in forming the alliance are in sync with yours.

    CIBA has take some of the above initiatives and identified Mazars as a firm that will respect the CIBA-SMP relationship as well as the SMP-Client relationship. It reamins your choice if you want to work with the CIBA Strategic Alliance.

    You have to consider if the CIBA Strategic Alliance will be able to achieve your goals and objectives, If this is your choise then sign a letter of understanding between CIBA, the LP, and your firm.

    We recommend that you start small. Bring an Advisory Firm in on a special project or perhaps just on a single tax issue. This will establish a tone for how future engagements will evolve. The best of marriages begin with a courtship.

*(Source: AICPA: Practice Support Group)

Upstream and downstream alliances

  • Upstream alliance
  • If you are attempting to facilitate an upstream alliance, your goal should be to leverage the assets of the larger firm to yours and your client’s best advantage. The ideal relationship treats the firms as if they were satellite offices of one another, each having access to the other’s resources. None of this is accomplished without very well‐defined objectives and open lines of communication.

    The first step is to identify the strengths and services available through your upstream partner.

    Meet with the senior partners and have them provide you with an overview of their firm’s departments and a list of their specialties. Meet with the partner or accountant in charge of the department or services that you foresee implementing for your client base. Make sure they understand your firm and how you can help them.

  • Downstream alliances
  • Downstream alliances are very helpful if the job at hand is too small or price‐sensitive for a larger firm or the larger firms requires a niche service.

*(Source: AICPA: Practice Support Group)

Contractual issues to consider

As with any professional arrangement, care should be taken to ensure a clear understanding of the terms, and their effects on both firms and especially the client.

Three issues need to be clarified upfront:

  • The roles of CIBA, the LP and the SMP.
  • Terms of the long‐term alliance
  • Terms for the specific engagements that will develop from that alliance

You may consider a formal strategic alliance agreement, but as the relationship evolves over time, it will be difficult to identify all the possible scenarios. There should, however, be a letter of understanding highlighting the spirit of the agreement.

Issues to cover include the following:

  • CIBA overview of the process and roles in dispute resolution.
  • Communications.
  • Client relations:
    • Your clients should always be aware of and approve of any shared services.
    • As the primary accountant, you have a duty to protect your client’s confidentiality.
    • Information regarding the firms involved, the nature of the assignment, and the billing arrangements should be in writing.
    • Protection of personal information.
  • Dispute resolution.
  • Noncompete:
    • You should always include a noncompete clause in all strategic alliance agreements (Still, if you are afraid the firms in your alliance will steal your clients, you have picked the wrong firms).
    • Firms don’t “own” clients to techncially they may move between firms. However firms do control the engagegment, marketing and relationship and this should be specified in the contract.
  • Nonsolicitation of employees.
  • Billing:
    • CIBA does not prescribe or get involved in any rates detemined by the parties – the Large Practice (LP) and the Small and Medium Practices (SMP)
    • Rates and fees should be thoroughly understood and agreed between the LP and the SMP.
    • Depending on the particular assignment at hand, billing can be between firms or directly to the client.
    • Billing passed on to the client can be in the form of a line item, such as a passthrough cost, or invisible.
  • Individual projects on behalf of clients should be more formalized based on the nature of the service.
  • Statutory compliance and ethical obligations:
    • Disclosure of relationship and fees.
    • Referrals and commissions.
    • Independence requirements in auditing standards and regulations.

*(Source: AICPA: Practice Support Group)

Choose a structure that best fit the needs of the client

There are several types of structures used to establish strategic alliances including special projects and engagements, joint ventures, and “just‐in‐time” consulting.

  • Special projects and engagements.
  • In this type of arrangement, you contract with your affiliated firm to conduct a particular service directly for your client. This could be business valuation, investment consultation, personal financial plan, cost accounting study, or any other type of freestanding service. In this arrangement, separate engagement letters are issued and typically the allied firm bills the client directly for the service. Your firm’s job is to coordinate the scope of the service and monitor the engagement on behalf of your client.

  • Joint ventures.
  • In this kind of arrangement you are working with your allied firm by dividing the scope of work into specific pieces. For example, if your firm doesn’t perform audits, you could subcontract the audit portion of the engagement to an allied firm. They would have separate engagement letters with the client and render their own invoices.

  • “Just‐in‐Time” consulting.
  • One of the strongest advantages to a smaller firm in an alliance is the ability, on a specific basis, to “rent” rather than “own” expertise needed. Just‐in‐time consulting allows you to use the resources of your allied firm as if they were yours. This arrangement is most applicable for specific tax or accounting questions that arise as part of your regular engagement. Invoicing in these matters is generally directly between the firms. In effect, you become the client. Costs can simply be passed on to the client invisibly. In many cases, the allied firm may have no knowledge of who the client even is.

*(Source: AICPA: Practice Support Group)

Oversight and Dispute Resolution

  • Background and motivation
  • CIBA is the representative body for business accountants in Southern Africa with a mandate to promote and enhance oppertunities for its members.

    CIBA lobby intensely to ensure our members continue to be recognised laws and regulations as accounting officers, independent reviewers, and independent accounting professionals providing critical reporting services for all spheres in society including government, the public, private, and NPO sectors for a range of entities including: SMEs, schools, co-ops, sectional titles, companies, close corporations and other entities.

    However legislation may sometimes require that a reporing service only be performed by: regisgtered auditors, large firms with lots of resources, or arge firms with access to specialist skills, alternatively a tender, business agreement, trust deed or other by-laws my determine specific requirements for a reporting service provider. This means our members face a chanllnege and a risk of not being able to access certain markets or clients. CIBA created the CIBA Strategic Alliance to address this issue.

    For example, accounting officers have for many years provided reporting services to Schools. However the GDE recently decided to issue new regulations that require all schools in Gauteng to be audited. The implications of this regulation is that auditors can no longer perform any accounting or advisory services to schools, and accounting officers can no longer issue accounting officer reports for those schools that cannot afford an audit report.

    In response CIBA developed the CIBA Strategic Alliance innitiative.

  • Our role in the alliance

    Our role is to engage with large firms with a national footprint, significant resources, willingness to respect the CIBA culture and members, ability to provide a comprehensive list of advisory, specialist and audit services, good reputation, a strong SME focus, and that wants to work with CIBA and commit to transfer skills to Small and Medium Practices (SMPs).

    After a number of informal discussion within the accountancy sector, MAZARS stepped forward as our first Strategic Alliance large firm and was willing to pilot the project with us.

    Our role is to:

    • Define the parameters of the Strategic Alliance.
    • Draft and monitor the implementation of a Memorandum of Agreement between CIBA and Advisory firms.
    • Draft and monitor the implementation of a Memorandum of Understanding between CIBA and Advisory Firms.
    • Register SMPs that particpate in the Strategic Alliance.
    • Assist with drafting the service contracts between CIBA Advisory Firms and SMPs.
    • Appointed as the Dispute Resolution Officer in the service contracts.
    • Arrange mentoring and review session to improve the understanding between the parties of their roles and responsibilities in terms of the Strategic Alliance.
    • Annualy provide feedback on the results achieved by the Strategic Alliance.
    • Issuing of Strategic Alliance Allied Firm (SAAF) certificate that the SMP can utilise of marketing and branding.
    • Authorised content for publication on the SMPs website and brochures explaining the SMPs status as Allied Firm to the Strategic Alliane, and how this status benfits the SMPs clients.

Becoming an Allied Firm

Membership to the CIBA Strategic Alliance is limited to participating firms.

  • Large firm alliance provider and SMP

    Donation to the Empowerment Fund for African Accountants (EFAA):

    • % of Revenues generated as a sponsorship.
    • Skills transfer.
  • Access
  • Login to your membership profile and complete the application form. Consideration will be given to quality , size and commitment to professional standards.

Help CIBA grow the profession and reduce unemloyment

  • Providers and Allied firms donate cash CIBA Empowerment fund for African Accountants (EFAA).
  • That means with the help of CIBA members we can generate more than R1million in development funding.
  • With a R1 million CIBA can develop 50 unemployed black graduates and place them in practice, earning a salary.

Yes! Give me a Strategic Alliance with an Advisory Firm

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