Palestine

The legal and regulatory framework for accounting and auditing in Palestine is established through company, securities, banking, and capital market legislation, together with requirements issued by the Palestinian Monetary Authority (PMA), the Palestine Capital Market Authority (PCMA), and other sector regulators.

Under the Securities Law No. 12 of 2004 and related regulations, banks, financial institutions, insurance companies, listed companies, and other regulated entities are required to prepare financial statements in accordance with International Financial Reporting Standards (IFRS) and make those financial statements publicly available.

For other private sector entities, the Companies Law No. 12 of 1964 requires financial statements to be prepared in accordance with internationally accepted accounting standards. Amendments approved in January 2019 further clarified the application of IFRS and IFRS for Small and Medium-sized Entities (IFRS for SMEs) within the jurisdiction.

The Companies Law No. 12 of 1964 establishes mandatory audit requirements in Palestine. In addition, the PMA, the PCMA, and the Palestine Exchange require audits for entities under their respective supervision, including banks, financial institutions, insurance companies, and listed companies.

Audits in Palestine are required to be conducted in accordance with international auditing standards. Amendments approved in January 2019 further clarified the application of International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB).

There is no separate national accounting standard-setting framework in Palestine. IFRS and IFRS for SMEs form the basis of the financial reporting framework within the jurisdiction.

The audit profession in Palestine is regulated through a shared framework involving the Board of Professional Auditing (BPA) and the Palestinian Association of Certified Public Accountants (PACPA). The Auditing Profession Law No. 9 of 2004 establishes the BPA as the statutory body for the audit profession and recognizes PACPA as the professional association for licensed auditors.

Only licensed auditors may practice as Certified Public Accountants (CPAs) and issue audit reports in Palestine. To obtain a license, individuals must meet the eligibility requirements established under the Auditing Profession Law, including academic qualifications, prescribed practical experience in accounting and auditing, and successful completion of the professional examination administered by the BPA.

The BPA is responsible for licensing auditors, maintaining the regulatory framework for the profession, conducting professional examinations, issuing implementing regulations, maintaining oversight of licensed practitioners, and applying disciplinary measures where required. The BPA is composed of representatives from the Ministry of Finance, public oversight authorities, the Ministry of National Economy, the PMA, PACPA, and academia.

Membership in PACPA is mandatory for licensed auditors and is required to practice the profession. PACPA supports the development of the profession, maintains member records, issues annual practice permits, monitors members’ compliance with professional requirements, and contributes to professional education and quality assurance activities. Non-audit accounting activities, including bookkeeping and tax return preparation, are not subject to the same statutory regulation, although individuals in these areas may join PACPA voluntarily and be subject to its rules.

Auditors of regulated entities are subject to additional requirements established by sector regulators, including the Palestinian Monetary Authority (PMA), the Palestine Capital Market Authority (PCMA), and the Palestine Exchange. These requirements include provisions related to auditor approval, appointment, removal, independence, and enforcement for banks, financial institutions, insurance companies, listed companies, and other regulated entities.

There is no independent audit oversight authority in Palestine. Oversight and regulation of the audit profession are carried out through a shared framework involving the Board of Professional Auditing (BPA) and the Palestinian Association of Certified Public Accountants (PACPA).

The Auditing Profession Law No. 9 of 2004 establishes the BPA as the statutory regulatory body responsible for licensing auditors, administering the professional qualification process, maintaining auditor registries, issuing implementing regulations, and applying disciplinary measures where required. PACPA supports the regulation of the profession through its responsibilities related to professional development, quality assurance reviews, and investigation and disciplinary activities for its members.

To practice auditing in Palestine, individuals must obtain the Certified Public Accountant qualification, receive a license from the BPA, and become members of PACPA. Auditors of regulated entities are additionally subject to oversight requirements established by sector regulators, including the Palestinian Monetary Authority and the Palestine Capital Market Authority.

The Palestinian Association of Certified Public Accountants (PACPA) was established in 1995 as the national professional accountancy organization for Palestinian accountants and auditors. The legal role of PACPA was further defined under the Auditing Profession Law No. 9 of 2004, which provides the statutory framework for the audit profession in Palestine.

Membership in PACPA is mandatory for licensed auditors and audit firms. Other segments of the profession may join PACPA voluntarily and, upon admission, are subject to its rules and regulations.

PACPA’s responsibilities include maintaining member and auditor records, supporting the development of the audit profession, contributing to professional education and continuing professional development, operating a quality assurance review system, and investigating and disciplining members for non-compliance with applicable professional requirements. Suspension or expulsion decisions remain subject to the approval of the Board of Professional Auditing.

PACPA has continued to strengthen its professional support activities, including quality management implementation support for members. In 2025, PACPA reported completing the third phase of its Quality Management Program, including member guidance and technical support related to International Standards on Quality Management 1 and 2.

PACPA is a member of regional and international professional organizations, including the Arab Federation of Accountants and Auditors and the Mediterranean Federation of Certified Accountants.

The quality assurance (QA) review system in Palestine is established under the Auditing Profession Law No. 9 of 2004, which provides the Palestinian Association of Certified Public Accountants (PACPA) with authority to establish and operate a QA review system. The law is available through PACPA’s laws and regulations page and the Palestinian legal database.

PACPA reports that the QA review system is mandatory for licensed auditors and audit firms and has been operational since 2020. The system applies a risk-based approach, with audit firms reviewed every three years and individual practitioners reviewed every six years. PACPA completed the third phase of its Quality Management Program in January 2025, including member guidance, training, and technical support for implementation of the updated quality management requirements.

PACPA’s QA manual was updated in 2023 to incorporate International Standard on Quality Management 1 (ISQM 1) and International Standard on Quality Management 2 (ISQM 2)

The jurisdiction-level QA review framework is operational for licensed auditors and audit firms and is aligned with the relevant requirements of SMO 1.

Current Status: Adopted

Initial professional development requirements for Certified Public Accountants (CPAs) are established under the Auditing Profession Law No. 9 of 2004. To obtain a license to practice auditing, candidates must complete a university degree in accounting or a related discipline, fulfill prescribed practical experience requirements, and successfully pass the professional examination administered by the Board of Professional Auditing (BPA). The Ministry of Education and Higher Education is responsible for accreditation and oversight of university programs, while the BPA is responsible for administering the professional qualification process and verifying fulfillment of professional requirements.

The Palestinian Association of Certified Public Accountants (PACPA) establishes continuing professional development requirements for its members, including licensed auditors. PACPA links continuing professional development compliance to annual practice permit renewals and continues to provide mandatory professional training programs for members through its Continuing Education and Training Committee.

PACPA participated in the Middle East and North Africa International Education Standards (IES) project led by IFAC and the International Panel on Accountancy Education, which included a gap analysis against the 2019 IES requirements and confirmed alignment at the jurisdiction level.

Current Status: Adopted

Mandatory audit requirements in Palestine are established under the Companies Law No. 12 of 1964 and sector-specific requirements issued by regulators for entities under their supervision. The Board of Professional Auditing (BPA) approved amendments on January 27, 2019, requiring the adoption of International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board for audits conducted in the jurisdiction.

ISA for Audits of Financial Statements of Less Complex Entities has also been adopted.

Current Status: Adopted

The Companies Law No. 12 of 1964 outlines ethical requirements in Palestine. The Board of Professional Auditing’s (BPA) approved amendments on January 27, 2019, which require adoption of the International Code of Ethics as issued by IESBA.

The Palestinian Association of Certified Public Accountants (PACPA) amended its own bylaws to require members’ adherence with the International Code of Ethics as issued by IESBA. The association’s membership is mandatory for all auditors in the jurisdiction and includes other segments of the profession, such as bookkeepers, that voluntarily decide to join.

Current Status: Adopted

The Ministry of Finance is responsible for issuing public sector accounting policies in Palestine. Public sector financial reporting is prepared on the cash basis of accounting, with reference to cash-basis International Public Sector Accounting Standards (IPSAS) and Palestinian legal requirements.

According to the IFAC/CIPFA International Public Sector Financial Accountability Index 2020, Palestine is transitioning from cash-basis IPSAS toward accrual-basis IPSAS, with national standards expected to be on a partial-accrual basis and modified for local context by 2030. Accordingly, accrual-basis IPSAS have not been fully adopted for all public sector entities. The jurisdiction is assessed as Partially Adopted.

Current Status: Partially Adopted

The investigative and disciplinary (I&D) system in Palestine is established under the Auditing Profession Law No. 9 of 2004 and is implemented through a shared framework involving the Palestinian Association of Certified Public Accountants (PACPA) and the Board of Professional Auditing (BPA). PACPA has authority to investigate and discipline members for non-compliance with applicable laws, regulations, the code of ethics, practicing without a license, and breaches of professional conduct, with suspension or expulsion subject to final approval by the BPA.

PACPA reports that it operates an I&D system that incorporates the requirements of Statement of Membership Obligations 6, including complaints-based and information-based processes, a link with quality assurance review findings, sanctions, appeals, record keeping, public interest considerations, liaison with outside bodies, and periodic review of the system.

The BPA retains statutory authority over auditor licensing and disciplinary procedures, including sanctions affecting the right to practice. PACPA may impose member-related sanctions and recommend suspension or expulsion to the BPA where appropriate.

The I&D system is established and operational for professional accountants subject to PACPA membership and BPA licensing requirements and is aligned with the relevant requirements of SMO 6. Accordingly, the system is assessed as Adopted.

Current Status: Adopted

The Securities Law No. 12 of 2004 and related regulations issued by the Palestine Capital Market Authority require listed companies and insurance companies to apply International Financial Reporting Standards (IFRS). Banks and other financial institutions regulated by the Palestinian Monetary Authority are also required to apply IFRS. The IFRS Foundation jurisdiction profile confirms that Palestine has adopted IFRS for listed companies, insurance companies, banks, and other regulated financial institutions.

For other private sector entities, the Companies Law No. 12 of 1964 requires financial statements to be prepared in accordance with internationally accepted standards. Amendments approved on January 27, 2019 require the adoption of IFRS and IFRS for Small and Medium-sized Entities.

Current Status: Adopted

Relevant Organizations

Arab Federation of Accountants and Auditors

Board of Professional Auditing

IFRS Foundation Jurisdiction Profile – Palestine

International Public Sector Financial Accountability Index

Ministry of Finance of Palestine

Palestine Capital Market Authority

Palestine Exchange

Palestinian Association of Certified Public Accountants

Palestinian Monetary Authority

Relevant Legislation

Auditing Profession Law No. 9 of 2004

Companies Law No. 12 of 1964

Securities Law No. 12 of 2004

Relevant Publications

IFAC Knowledge Gateway, “Case Study: How Palestinian Association of Certified Public Accountants Established a QA Review Mechanism”

Palestinian Association of Certified Public Accountants, “Completion of the Third Phase of the Quality Management Program”

Palestinian Association of Certified Public Accountants, Internal Regulations 2019

Palestinian Ministry of Finance, Final Accounts Reports