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Illustration of calculation of CHAIN_CITY and CHAIN_NATION_ONLY

Example of Calculation of CHAIN_CITY:
Ernst & Young San Jose office has 39 client companies that are publicly listed in the fiscal
year of 2005. Among these 39 clients, 15 clients (supplier companies) have reported having
major customer relationships (and both the supplier companies and their reported major
customers are covered in Audit Analystics). Ernst & Young San Jose office audited six out of
15 suppliers and their reported major customers annual financial statements for the year
2005. In this case, CHAIN_CITY is calculated as 6/15 = 40%.
Example of Calculation of CHAIN_NATION_ONLY:
Ernst & Young has 1,776 client companies that are publicly listed in the fiscal year of 2005
nationwide in the U.S. Among these 1,776 clients, 217 clients (supplier companies) have
reported having major customer relationships (and both the supplier companies and their
reported major customers are covered in Audit Analytics. Ernst & Young is the auditor for
122 of the 217 suppliers and these suppliers major customers, with only 11 by the same
auditor office of Ernst & Young. In this case,we othorgonize CHAIN_CITY with
CHAIN_NATION_ONLY, and calculate CHAIN_NATION_ONLY as (122-11)/217 = 51.2%.

13