Institute of Certified Public Accountants in Israel

ICPAS operates as a voluntary professional association rather than the statutory licensing authority. The Israel Auditors' Council, a body subordinate to the Ministry of Justice, oversees licensing, examinations, and continuing supervision of the profession, while ICPAS serves as Israel's member body in the International Federation of Accountants and issues professional rules for its members.[3] Approximately 80% of Israeli auditors are institute members, according to the institute's English-language guide.[3]

Its present legal form is a company limited by guarantee incorporated on July 9, 1956, to assume the assets and liabilities of the predecessor association.[2] The institute nevertheless traces the professional association's founding to 1931 and reports that it brings together more than 18,757 practicing accountants.[1]

The roots of organized accountancy in Israel trace to the British Mandate period, when no formal educational institutions for the profession existed in Palestine.[4] Some aspiring accountants traveled abroad to qualify, while a minority pursued correspondence study with the London Institute of Accountants, receiving textbooks and exercises from London and returning completed work for examination there.[4]

Candidates who trained abroad were required by the Palestine government to sit examinations held in England on the same day as other candidates and to complete a two-year apprenticeship in an accounting office.[4] The English examination system demanded that all subjects be passed at a single sitting; failure in any one subject obligated the candidate to retake all subjects at the next session.[4] Successful candidates received licenses issued under section 105(4) of the Companies Ordinance of 1929, signed by the chief secretary of the Mandate government.[4]

After the end of the Mandate, Israel had no statutory route for obtaining an accountant's license until the Knesset enacted the Accountants Law and established the Israel Auditors' Council in 1955.[4] The first Israeli licenses issued under that legislation were numbered sequentially from 1 to 2,000, with the license number serving as an indicator of professional seniority; later licenses used the candidate's file number rather than a sequential series.[4]

The professional association the institute traces itself to was founded in 1931.[1] The legal corporate entity — a company limited by guarantee — was incorporated on July 9, 1956, at which point it assumed the assets and liabilities of the predecessor Association of Certified Accountants and Auditors in Israel.[2] The institute's professional bulletin, רואה החשבון (The Accountant), has been published since 1939, initially under the title רואה החשבון המוסמך (The Certified Accountant) until July–September 1955, when the title changed to its current form.[5] The National Library of Israel catalogs the publication, in Hebrew, with issues documented through at least 2018.[5]

ICPAS is a voluntary professional body, distinct from the Israel Auditors' Council, which is the statutory authority responsible for licensing, examinations, and ongoing supervision of the profession.[6][3] Approximately 80% of auditors in Israel are institute members, and approximately half of Israeli auditors work in accounting and management roles outside auditing firms rather than performing audits.[3]

The institute's memorandum and articles set out its legal purposes: organizing and representing holders of accounting licenses under the Accountants Law of 1955; protecting the interests, professional standards, ethical level, freedom, dignity, and rights of members; supervising members professionally; and establishing binding practice rules.[2] The memorandum also authorizes engagement with legislative institutions and other Israeli bodies, representation on governmental and public committees both in Israel and abroad, and affiliation with international professional organizations.[2]

The memorandum further permits the institute to establish and maintain libraries, clubs, and seminars; organize conferences, discussions, lectures, and professional classes; establish economic institutions for mutual assistance among members; publish professional periodicals and literature; and support scholarly publications.[2] In its relationship with public authorities, Securities Law provisions require the Israel Securities Authority to give the institute's president an appropriate opportunity to be heard before issuing certain directives concerning the presentation of financial-statement items; while such directives are in force, the institute may publish an opinion about them only with the Securities Authority's consent.[7]

Ordinary membership is open to persons holding a license under section 4 of the Accountants Law who are accepted under the institute's regulations and sign the required declaration; the number of ordinary members is unlimited.[2] Voting rights generally require at least six consecutive months of continuous membership and payment of current dues.[2]

The regulations provide for four categories of membership: ordinary members, honorary members, international associate members, and institute students.[2] An honorary member may be admitted by a three-quarters vote of the central committee for exceptional service to the profession, but may not vote, elect, or stand for election.[2] International associates must be qualified to practice accountancy abroad, be at least 23 years old, and either not be Israeli residents or have held Israeli residency for less than two full years; they may not hold an Israeli accounting license.[2]

The institute's governing institutions include the general assembly, president and presidency, central committee, professional council, two standing professional committees, other committees, regional divisions and branches, and a disciplinary tribunal.[2] The central committee sets institute policy, manages its affairs, controls the use of institute funds, may issue professional opinions, and selects the institute's representatives to the Israel Auditors' Council.[2] It may comprise up to 24 members and serves three-year terms.[2]

The president is elected personally, directly, and by secret ballot for a three-year term, with a maximum of two consecutive terms.[2] A presidential candidate must generally have been an institute member for at least five years and a central-committee member for at least three years.[2] The institute's current central committee identifies CPA Chen Schreiber as president, with Ofir Minirav as honorary president and Jack Blanga and Dafna Ravid-Barzily as acting presidents.[8]

The regulations establish three principal professional bodies: a 23-member professional council, a 15-member committee for accounting and financial-reporting rules, and a 15-member committee for auditing standards and procedures.[2] Opinions, procedures, guidance, and other professional rules published by these bodies become binding on institute members in their professional work after publication by the central committee.[2]

The institute divides its members geographically into the Jerusalem, Tel Aviv and Center, and Haifa and North regions, with branches including Beersheba and the South, Nazareth and the Valleys, and Netanya-Hadera.[2] Regional bodies organize continuing education, conferences, lectures, liaison committees with authorities, and social and welfare activities.[2]

The institute maintains a two-tier disciplinary tribunal: a first instance of at least 28 members and an appeals instance of at least 12 members, with cases ordinarily heard by panels of three.[2] Its jurisdiction covers disciplinary complaints, violations of the regulations, failure to comply with institute decisions, disputes between members arising from professional practice, and questions concerning professional conduct.[2]

Available sanctions include warning, reprimand, temporary suspension, expulsion, payment of up to 6,000 shekels to the institute, publication of a judgment, and — where applicable — compensation of up to 25,000 shekels.[2]

The institute's professional council and standing committees may issue opinions, procedures, guidance, and other professional rules that become binding on members after publication by the central committee.[2] An external review of auditing accountants' work is carried out by the Peer Review Institute, described in a government report as an ICPAS subsidiary.[6]

The Israel Securities Authority collaborates with ICPAS in operating and financing the Israel Accounting Standards Board.[6] ICPAS Standard No. 57 requires public companies using full International Financial Reporting Standards (IFRS) to prepare consolidated accounts covering their foreign subsidiaries; full IFRS has been mandatory for Israeli public companies since 2008, while Israel Accounting Standards Board standards apply to other companies, with some IFRS standards adapted to the Israeli context.[6]

For 2009 tax returns, the institute and the Israel Tax Authority operated a special arrangement allowing most accounting firms to spread clients' annual filings over an extended schedule.[9] Eligibility required taxpayers to authorize their CPAs to represent them and to register that representation with the Tax Authority, with the CPA listed as the taxpayer's primary representative.[9] Deadlines and filing percentages varied according to whether the CPA was electronically linked to the Tax Authority's Shaam system.[9]

In 2022, the institute established an expert committee on digital currencies, tasked with proposing regulation aimed at protecting investors, promoting fair activity in the market, and making optimal use of opportunities associated with Israel's digital-currency market.[10]

The institute also publishes professional literature. The National Library of Israel catalogs a 2022 two-volume Hebrew edition of the institute's Professional Publications (פרסומים מקצועיים), as well as a 2019 edition of the same series.[11][12] An earlier institute publication, a list of accounting firms (רשימת חברי הלשכה), was published in Tel Aviv in 1975.[13]

ICPAS occupies an intermediary position between statutory regulation and voluntary professional self-government. Its professional council and committees can issue rules binding on members after publication by the central committee, while its regional bodies organize continuing education and maintain liaison with public authorities.[2] The Israel Securities Authority also collaborates with ICPAS in operating and financing the Israel Accounting Standards Board.[6]

Its role also has an international dimension: as Israel's member body in the International Federation of Accountants, ICPAS links its membership to international professional institutions.[3] At the same time, its voluntary status limits its authority to membership and professional self-regulation; statutory licensing, examinations, and formal supervision remain with the Israel Auditors' Council.[3]

A Public Expert Committee for Regulating the Israeli Accounting Profession, whose report was published by the institute, argued that effective regulation should maintain high professional standards and prestige, protect consumers, enable the profession to act as an intermediary between the public and government, promote continuing professional development, update the ethical code, and prevent bad practices.[14] The committee considered alternative divisions of regulatory responsibilities between ICPAS and the Auditors' Council, including strengthening the council, making it an elected body, or transferring training and ethical-development functions between the two bodies.[14]

In the judicial sphere, the institute was the petitioner in HCJ 2589/20, Institute of Certified Public Accountants in Israel v. Government of Israel. On April 30, 2020, the Supreme Court rejected the petition, which had sought to require the Israel Tax Authority to postpone March tax payments for small and medium-sized businesses because of the economic effects of the COVID-19 pandemic.[15] The court found the petition had been filed after substantial delay, was overly broad, and presented an incomplete factual picture.[15]