Institute of Certified Public Accountants in Israel

The Institute of Certified Public Accountants in Israel (ICPAI) has no direct responsibility for quality assurance (QA) reviews, which are conducted by the Israeli Oversight Board (IOB) for Certified Public Accountant firms that audit reporting corporations. Other firms may voluntarily opt into the QA review system.

ICPAI uses its best endeavors to support the QA framework through its auditing standard-setting role, continuing professional development activities, and ongoing engagement with the IOB. ICPAI has adopted Israeli Auditing Statement No. 67, Guidelines in Respect of Quality Review in Certified Public Accounting Firms, and International Standard on Quality Control 1. The institute also provides technical guidance, professional training, and awareness-raising activities to support firms in strengthening quality control systems and preparing for the implementation of quality management standards.

ICPAI meets periodically with the IOB to receive updates on QA review findings and inspection outcomes and publishes related summaries and professional updates for members. Through its professional committees and educational activities, ICPAI also promotes awareness of International Standard on Quality Management 1, International Standard on Quality Management 2, and International Standard on Auditing 220 (Revised), which are effective internationally but have not yet been adopted in Israel.

The QA review system does not extend to all mandatory audits, and the quality management standards noted above have not yet been adopted in the jurisdiction.

ICPAI is encouraged to continue working with the IOB to further align the jurisdictional framework with SMO 1 requirements and to continue supporting firms with implementation readiness for quality management standards.

Current Status: Review & Improve

The Institute of Certified Public Accountants in Israel (ICPAI) has no direct responsibility for establishing initial professional development requirements for auditors. These requirements are established under the Auditors Law, 5715-1955 and administered by the Auditors Council under the Ministry of Justice. Candidates must pass or obtain exemptions from the Council’s examinations, complete a two-year practical training period, and receive Council approval before being granted an auditor license.

ICPAI uses its best endeavors to support alignment with the International Education Standards (IES) through its representation on the Auditors Council, engagement with universities and other education stakeholders, and advocacy for stronger professional education requirements. ICPAI also provides continuing professional development activities, professional training, technical updates, and member education programs to support the competence of its voluntary membership.

A key jurisdiction-level gap remains the absence of a mandatory continuing professional development requirement for all licensed auditors or professional accountants. ICPAI reports that it has supported proposed legislation to introduce mandatory continuing professional development for licensed Certified Public Accountants and has undertaken work to develop a continuing professional development framework for its own members.

ICPAI is encouraged to continue advocating for mandatory continuing professional development requirements at the jurisdiction level and to further align its member education and continuing professional development framework with IES requirements.

Current Status: Execute

The Auditors Regulations (Manner of Auditor’s Practice), 5733-1973 grant the Institute of Certified Public Accountants in Israel (ICPAI) authority to issue auditing standards for application in Israel. ICPAI carries out this role through its Auditing Standards Committee, which reviews International Auditing and Assurance Standards Board pronouncements and selectively converges them into Israeli auditing standards.

Since the previous assessment, ICPAI has continued updating Israeli auditing standards, including recent standards related to auditor reporting and comparative information, such as Israeli Auditing Standard 701 and Israeli Auditing Standard 710. These standards are based on corresponding International Standards on Auditing (ISA) but are adopted through a convergence approach rather than direct adoption of ISA as issued.

ICPAI supports implementation through technical guidance, member communications, continuing professional education programs, seminars, and professional publications on new and revised auditing standards.

Although ICPAI continues to make progress in converging selected standards with ISA, the latest International Auditing and Assurance Standards Board Handbook has not been fully adopted in Israel and many standards remain based on pre-2018 ISA or localized national standards.

ICPAI is encouraged to continue accelerating convergence with the latest ISA, including quality management standards and other currently effective pronouncements, and to continue supporting implementation readiness for members.

Current Status: Plan

Ethical requirements for auditors in Israel are established through a shared regulatory framework involving the Ministry of Justice and the Institute of Certified Public Accountants in Israel (ICPAI). ICPAI establishes ethical requirements for its members under its Articles of Association and maintains Rules of Professional Conduct, while statutory ethical requirements for licensed auditors are established under the Auditors Law, 5715-1955 and related regulations.

ICPAI maintains an Ethics Committee that provides guidance and opinions on ethical matters, supervises implementation of the rules, and refers matters to the Board of Directors where enforcement action may be required. ICPAI also supports implementation through ethics-related continuing professional development, member guidance, publications, and awareness-raising activities.

ICPAI reports that its ethical requirements are based on the 2016 International Ethics Standards Board for Accountants (IESBA) Code of Ethics and that it is reviewing the latest Code to identify and address gaps. ICPAI also reports that it continues engaging with the Ministry of Justice and other regulatory authorities regarding convergence with the latest IESBA Code.

ICPAI is encouraged to continue accelerating its review and convergence activities and to further support alignment of the jurisdictional ethical framework with the latest International Code of Ethics for Professional Accountants issued by the IESBA.

Current Status: Execute

The Institute of Certified Public Accountants in Israel (ICPAI) has no direct responsibility for public sector accounting standard-setting. The Israel Government Accounting Standards Board (IGASB), established by the government, is responsible for setting public sector accounting standards in Israel. The jurisdiction applies accrual-basis national standards with reference to International Public Sector Accounting Standards (IPSAS), following Government Resolution No. 2375 and IGASB’s adoption and publication of IPSAS-based standards in Hebrew.

ICPAI uses its best endeavors to support implementation through continuing professional development, technical conferences, professional guidance, and a technical support function for members on public sector accounting and auditing matters. ICPAI is also supporting translation activity, with the 2022 Handbook of International Public Sector Accounting Pronouncements listed as in progress for Hebrew translation by ICPAI.

ICPAI is encouraged to continue supporting implementation of IPSAS-based public sector accounting standards, engaging with IGASB where appropriate, and participating in IPSASB standard-setting consultations where relevant.

Current Status: Sustain

The Institute of Certified Public Accountants in Israel (ICPAI) shares responsibility for investigation and discipline (I&D) with the Auditors Council. The Auditors Council, operating under the Ministry of Justice, is responsible for statutory disciplinary processes for licensed auditors under the Auditors Law, 5715-1955 and related regulations. The Ministry of Justice provides a public complaint mechanism for complaints against auditors and maintains a public database of disciplinary decisions.

ICPAI maintains a member-level I&D system through its Ethics Committee and Disciplinary Tribunal. New members are required to confirm adherence to ICPAI’s ethical code, professional standards, rules, and requirements. ICPAI raises awareness of professional conduct and disciplinary requirements through conferences, professional development courses, publications, and ethics guidance for members.

Since the previous assessment, the statutory I&D framework has continued to operate, with public disciplinary decisions issued and published by the Ministry of Justice. ICPAI reports that prior gaps related to public interest considerations, initiation of proceedings, and linkage with quality assurance findings have been addressed through amendments to the Auditors Law and related processes.

Current Status: Sustain

The Institute of Certified Public Accountants in Israel (ICPAI) has no direct responsibility for the adoption of corporate reporting standards. The Israel Accounting Standards Board (IASB Israel) is responsible for issuing Israeli Accounting Standards, while International Financial Reporting Standards (IFRS Accounting Standards) as issued by the International Accounting Standards Board are required for most domestic publicly accountable entities, including companies whose securities trade in the Israeli public market and insurance companies, with exceptions for banks, credit card companies, pension funds, provident funds, and certain dual-listed entities.

ICPAI uses its best endeavors to support implementation through professional development courses, conferences, technical updates, professional publications, and member communications on changes in IFRS and financial reporting requirements. ICPAI also supports IASB Israel by contributing professional input on reporting needs and developments affecting companies in the jurisdiction.

ICPAI is encouraged to continue supporting implementation of IFRS, engaging with IASB Israel on corporate reporting developments, and participating in the international standard-setting process where relevant.

Current Status: Sustain