Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Institute of Certified Public Accountants in Israel

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      ISRAEL


    2. Name of member body:
      Institute of Certified Public Accountants in Israel

      Or please specify name:



    3. Individual responsible for preparation:
      Dov Mayer


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      09 / 1977



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      FEE, FCM



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: The Companies Act
      b). the Enacting body: Ministry of Justice
      c). date the Act or Code came into force: 03 / 2000


    25. How can IFAC obtain a copy of the Act or Code?
      Upon request


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify):
      Private companies   Other (please specify):
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities The companies act indicates reqmts for submission of financial statements in general
      Private companies Accounting standards as published by ICPAS and the Israeli Accounting Standards Board
      Governmental Accounting standards as published by ICPAS and the Israeli Accounting Standards Board
      Not-for-profit Accounting standards as published by ICPAS and the Israeli Accounting Standards Board plus Standard No. 5 for not-for-profit entities
      Other (please describe)
      Other (please describe)


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities The Companies Act obliges every company to appoint an auditor who will audit its financial statements
      Private companies The Companies Law states that all companies must have their financial statements audited except for private companies with turnover up to 500,000 NIS according to the law.
      Governmental All governmental entities are subject to audit
      Not-for-profit All companies must have their financial statements audited except for companies with turnover up to 500,000 NIS
      Other (please describe)
      Other (please describe)


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Companies registrar
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      The Securities Act mentions the requirements through bylaws articles in general

    2. the Enacting body(ies)

      The Securities Authority

    3. the latest amendment date?

      2004


    35. How can IFAC obtain a copy of the Legal authority?
      On request


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      Some instructions and clarifications where published by the Securities Authority, the Supervisor of Banks, the Supervisor of Insurance and Government Companies Authority.


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify): Companies registrar
      Audit committee   Other (please specify): Governmental Companies Authority
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: 1 Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      Rotation is required every 6 years with an option for prolongation of 3 additional years only for governmental companies.



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity ICPAS by-laws 07/04 The Auditing and Assurance Standards Committee of the ICPAS
      Other (please describe) All companies ICPAS by-laws 07/04 The Auditing and Assurance Standards Committee of the ICPAS
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      On request

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (The Auditing and Assurance Standards Committee of the ICPAS)


    44. For The Auditing and Assurance Standards Committee of the ICPAS, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Technical Committee of ICPAS

      b. Name of standards

      Israeli Auditing Standards


    45. How many voting members does the standard-setting body have?
      15


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Board of Directors of the Institute

      Re Q.48 - There is no specified term of appointment for Committee members.


    49. What is the term of appointment for members?
      Year(s)


    50. For how many years has the standard-setting body been in existence?
      74 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      80,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      4.379



    52. To what entity is the standard-setting body accountable?


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      public exposure of standards by public hearing and publications (including internet).

    2. accessibility of meetings (i.e., public or private)

      Meetings of the Board of Directors

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority of votes of Central Committee of the ICPAS is required to approve final standards

    4. other relevant due process activities

      The standards are based on International Standards on Auditing


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice Code of Ethics 10/87 Auditors Council
      Professional Accountants in Business Code of Ethics 10/04 The Committee for Ethics of the ICPAS
      Professional Accountants in the Public Sector
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      On request.
      Some parts are available in English.

      NOTE: Members of the ICPAS are required to follow both ICPAS and Auditors Council Codes of Ethics while non-members have to follow Auditors Council Code of Ethics


      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (Auditors Council)


    56. For Auditors Council, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      The Auditors Council is a statutory body subordinate to the Ministry of Justice and consists of members from the Ministry, the Bank of Israel, Ministry of Finance, the Securities Authority and delegates from the Institute of Certified Public Accountants in Israel and members of the academia.

      b. Name of standards

      Code of Ethics


    57. How many voting members does the standard-setting body have?
      14


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: 13 voluntary members and 1 employed Chairperson


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The bodies represented in the Council nominate their representatives


    61. What is the term of appointment for members?
      3 Year(s)


    62. For how many years has the standard-setting body been in existence?
      49 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?
      Ministry of Justice


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      No exposure unless the Council decides otherwise.

    2. accessibility of meetings (i.e., public or private)

      Meetings are held private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority of votes is required to approve final standards

    4. other relevant due process activities

      The Code is based on IFAC Code of Ethics


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 Day(s)


    Section 6B -- Standard-Setting (The Committee for Ethics of the ICPAS)


    56. For The Committee for Ethics of the ICPAS, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Technical committee of ICPAS

      b. Name of standards

      Code of Ethics


    57. How many voting members does the standard-setting body have?
      18


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Board of Directors of ICPAS

      re. Q.61 - the term is not specified


    61. What is the term of appointment for members?
      Year(s)


    62. For how many years has the standard-setting body been in existence?
      74 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)



    64. To what entity is the standard-setting body accountable?
      ICPAS Board of Directors


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Draft standards are exposed for up to 90 days on the internet

    2. accessibility of meetings (i.e., public or private)

      Meeting are hold private

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority of votes of is required to approve final standards. (The larger of 2/3 votes of members of the ICPAS Board of Directors or 3/4 votes of those present at the meeting)

    4. other relevant due process activities

      The Code is based on IFAC Code of Ethics


    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      Elementary School ages 6 - 14
      Secondary School (HS) ages 14 - 18 including matriculation exams
      Universities or colleges (BA degrees, MA degrees, and Doctorate programs)


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      The Auditors Law (Roeh Heshbon Law) of 1955

      Final examinations by the Auditors Council and a yearly license from the Auditors Council


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      At least BA is required to sit final examination
      Professional examinations
      For individuals with no BA there are 15 professional exams to pass
      Practical experience
      Final qualifying examination
      There are two sessions annually (Spring and Summer term) individuals with at least BA degree may sit the exam or those without BA must complete 16 professional exams first
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe)


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      The Auditors Council

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      The Auditors Council is a statutory body subordinate to the Ministry of Justice and consists of members from the Ministry, the Bank of Israel, Ministry of Finance, the Securities Authority and delegates from the Institute of Certified Public Accountants in Israel and members of the academia.

    2. How many voting members does the relevant body(ies) have

      14

      13 government officials + 1 Chairperson

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Members of the Council are involved on voluntary basis and the Chairperson is employed

    4. For how many years has the body been in existence?

      49 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      On request

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:
      Re Q. 74
      The education program is delivered by education institutions and the final examination is delivered by the Auditors Council


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain) See Q. 73


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The Auditors Council


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      Candidates with no releveant academic degree are required to pass 15 professional exams


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify): payment of annual fees, CPE program exist but is not obligatory


    80. What entity grants the license?
      The Auditors Council


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      There is a reform of governmental accounting underway. For more information please see Attachment 1.

      b. Are the documents available in English?
      Yes   No



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity There is no applicable legal authority. See Q. 94a for comment. Israeli Accounting Standards Board
      Other (please describe) All Entities There is no applicable legal authority. See Q 94a for comment Israeli Accounting Standards Board
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?



      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Israeli Accounting Standards Board)


    95. For Israeli Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body



      b. Name of standards

      Israeli Accounting Standards


    96. How many voting members does the standard-setting body have?
      7


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: 7 voluntary, 1 employed


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      3 members are accountants who have professional experience in practice.
      3 members are related to the accounting profession (lawyers, economists).
      The chairperson is a professional accountant involved in standards setting and retired from well known accounting firm.


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      Both the Institute and the Securities Authority.

      Re Q. 100
      Term of appointment for members - 3 years, for the Chairman - 5 years


    100. What is the term of appointment for members?
      3 Year(s)


    101. For how many years has the standard-setting body been in existence?
      7 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      279,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      4,347



    103. To what entity is the standard-setting body accountable?
      The Securities Authority and the Institute of Certified Public Accountants in Israel


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      There is public exposure of standards over Internet. EDs are exposed for 90 days.

    2. accessibility of meetings (i.e., public or private)

      Meetings are held private.

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority of votes of the Professional Council of the Institute is required.

    4. other relevant due process activities

      Israeli standards are based on IFRSs


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      24 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      The Israeli Securitites Authority


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      Enforcing of accounting and reporting requirements.


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      N/A

    2. accounting and auditing standard-setting

      The Securities Authority together with the Institute of CPA's in Israel regulate Israeli Accounting Standards Board.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      1.Teams of professionals review the financial statements and relate questions to the representing bodies and they have the authority not to accept the statements.

      2. In case of non-compliance following sanctions may be imposed: warnings, penalties, exclusion from public trading etc.




    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Israeli Stock Exchange



    Section 10B -- Stock Exchange
    Israeli Stock Exchange Details


    110. For Israeli Stock Exchange, is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      The Securities Authority is responsible for enforcing.

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      Warnings, penalties exclusion from public trading etc.

    3. How enforcement actions are administered.

      Teams of professionals review the financial statements and relate questions to the representing bodies and they have the authority not to accept the statements.



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?

      The Auditors Council is responsible for monitoring the quality and performance of the profession.

    2. The number of members on the oversight body

      14

    3. Its powers

      The Auditors Council is responsible for licensing CPAs and for revoking license when deemed necessary.

    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

      An investigation committee reviews a complaint and assesses whether or not there has been an event of non compliance.

    5. The sanctions the oversight body may impose in the event of non-compliance

      Sanctions include:
      1. Warning
      2. Reprimand
      3. Suspension of license
      4. Withdrawal of license


    6. How the oversight body is accountable to any public institution or body

      The Auditors Council is responsible to the Ministry of Justice


    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      The Banks Supervisor


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      No, however they have a representative on the Auditors Council.

    2. accounting and auditing standard-setting

      The Israeli Supervisor of Banks issues directives regarding specific accounting standards for Israeli Banks. It does not issue any audit regulations.

    3. review of financial statements prepared by listed entities

      Yes - with regard to financial and banking institutions.

    4. enforcement of accounting, reporting and auditing requirements

      Special professional teams of the Banking Department inspect banks financial statements to verify compliance with these the Supervisor of Banks directives.



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      Governmental Companies Authority


    116. What is the source of Legal authority of the regulatory authority(ies)?


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      No

    2. accounting and auditing standard-setting

      Accounting: yes, auditing: no

    3. review of financial statements prepared by listed entities

      Yes

    4. enforcement of accounting, reporting and auditing requirements

      Yes



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      The Insurance Supervisor


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Part of the Ministry of Finance.


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      No

    2. accounting and auditing standard-setting

      Accounting: yes, auditing: no

    3. review of financial statements prepared by listed listed entities

      Yes

    4. enforcement of accounting, reporting and auditing requirements

      The Insurance Supervisor has some responsibility within enforcement, but limited only to insurance companies.



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.


    122. What is the source of Legal authority of each regulatory authority?


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession



    2. accounting and auditing standard-setting



    3. review of financial statements prepared by listed listed entities



    4. enforcement of accounting, reporting and auditing requirements




    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      In January 2005 ICPAS introduced the Peer Review Program for audit firms that audit the financial statements of public companies.
      FOR MORE INFORMATION PLEASE SEE ATTACHMENT 2.

      For more information see Attachment 1.



    125. Under what authority does the organization conduct the program of quality assurance review?
      The Peer Review Program is conducted under the supervision of ICPAS. Findings of the program are communicated to the Auditors Council and the Securities Authority.


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      The review is conducted by certified public accountants that are members of ICPAS and are selected and approved by the ICPAS steering committee responsible for the Peer Review Program.



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain)


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      The Auditors Council


    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      14


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: 13 voluntary + employed Chairperson


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Best person for the job


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Auditors Council is a statutory body subordinate to the Ministry of Justice and consists of members from the Ministry, the Bank of Israel, Ministry of Finance, the Securities Authority and delegates from the Institute of Certified Public Accountants i


    134. What is the term of appointment for members?
      3 Year(s)


    135. For how many years has the body been in existence?
      49 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      Ministry of Justice


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      20 Day(s)



     

     

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    * Indicates organizations that qualify to submit SMO Action Plans biennially

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