The Auditing and Assurance Standards Committee of the Institute of Certified Public Accountants in Israel (ICPA) sets the Israeli auditing standards. According to the self-assessment prepared by the ICPA in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, auditing standards in Israel are based on the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB). However, most of the Israeli standards are based on the original versions of ISAs and revisions of ISAs have not been incorporated into the Israeli auditing requirements.

General Overview

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, auditing standards in Israel are based on the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB). However, Israeli standards are based on the original versions of ISAs and revisions of ISAs have not been incorporated into the Israeli auditing requirements. (ICPA 2006)

The Companies Law states that all companies must have their financial statements audited except for private companies with turnover up to 500,000 NIS. The Auditing and Assurance Standards Committee of the ICPA sets Israeli Auditing Standards. The ICPA is a voluntary association of licensed accountants which was established over 60 years ago. As of 2005, over 9,000 Israeli Certified Public Accountants are members of the Institute. Among the Institute's many functions, probably the most important are the setting of technical professional standards and the issuing and enforcing of ethical rules. In addition, the ICPA provides continuing professional education and gives general assistance to its members with respect to a variety of matters and undertakes projects in the general public's interest. (ICPA website; ICPA 2005)

An auditor in Israel performs an audit in order to express an opinion as to whether the financial statements present fairly, in all material respects, the financial position of the company, the results of its operations, changes in its stockholders' equity and cash flows in conformity with Generally Accepted Accounting Principles (GAAP). In performing the audit, the auditor is required to comply with the Auditor's (Mode of Operation) Regulations in a professional and prudent manner. Furthermore, the auditor is required to perform the audit independently and objectively. (BDO Ziv Haft 2006, p. 61)

The Institute of Certified Public Accountants in Israel is a member of the International Federation of Accountants (IFAC). It is also a member of the International Accounting Standards Board (IASB), the Federation des Experts Comptables Europeens (FEE) and the Federation des Experts Comptables Mediterranees (F.C.M.). Additionally, the Institute is affiliated with most international accounting and auditing associations and participates in many of their meetings and conferences. (IFAC website; ICPA website)

The Principles

ISA 200 Objective and General Principles Governing an Audit of Financial Statements (effective 2006)

ID

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, Israeli auditing standard Objective and General Principles Governing an Audit of Financial Statements has been effective since January 2002. The content of the standard has not been modified to reflect the changes introduced to the International Standard on Auditing (ISA) 200. As of 2006, revision of the Israeli standard had been included into the ICPA's work program. (ICPA 2006, pp. 3, 20)

ISA 200 Objective and General Principles Governing an Audit of Financial Statements is effective for audits of financial statements for periods beginning on or after June 15, 2006. (IAASB 2007, p. 1)

ISA 210 Terms of Audit Engagements (effective 2006)

ID

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 91. The principles, procedures or related guidance of the International Auditing and Assurance Standards Board (IAASB) have been omitted from or modified to comply with national requirements or practices. As of 2006, revision of the Israeli standard had been included into the ICPA's work program. (ICPA 2006, pp. 3-5, 20)

ISA 210 Terms of Audit Engagements is effective for audits of financial statements for periods beginning on or after December 15, 2006. (IAASB 2007, p. 1)

ISA 220R Quality Control for Audits of Historical Financial Information (effective 2005)

II

There is no information publicly available as to Israel's compliance with this principle.

ISA 220 Quality Control for Audits of Historical Financial Information is effective for audits of historical financial information for periods commencing on or after June 15, 2005. (IAASB 2007, p. 1)

ISA 230R Documentation (effective 2006)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 87. (ICPA 2006, p. 5) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 230 Documentation is effective for audits of financial information for periods beginning on or after June 15, 2006. (IAASB 2007, p. 1)

ISA 240 The Auditor’s Responsibility to Consider Fraud in an Audit of Financial Statements (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 92. (ICPA 2006, p. 6) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 240 The Auditor's Responsibility to Consider Fraud in an Audit of Financial Statements is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 1)

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the ICPA prepared an exposure draft of the corresponding Israeli auditing standard. (ICPA 2006, p. 6) However, there is no further information publicly available as to Israel's compliance with this principle.

ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 1)

ISA 260 Communications of Audit Matters With Those Charged With Governance (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 76. Paragraph 20 of the International Standard on Auditing 260 has been omitted from the Statement 76 as it is considered to be irrelevant in Israel. (ICPA 2006, p. 7)

ISA 260 Communications of Audit Matters With Those Charged With Governance is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 300 Planning an Audit of Financial Statements (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 74. The content of the standard has not been modified to reflect the changes introduced to the International Standard on Auditing (ISA) 300. (ICPA 2006, p. 7)

ISA 300 Planning an Audit of Financial Statements is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 93. (ICPA 2006, p. 7) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 315 Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 320 Audit Materiality (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 86 which is based on the old version of ISA 320. (ICPA 2006, p. 8)

ISA 320 Audit Materiality is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 330 The Auditor’s Procedures in Response to Assessed Risks (effective 2006)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the ICPA prepared an exposure draft of the corresponding Israeli auditing standard. (ICPA 2006, p. 8) However, there is no further information publicly available as to Israel's compliance with this principle.

ISA 330 The Auditor's Procedures in Response to Assessed Risks is effective for audits of financial statements for periods beginning on or after June 15, 2006. (IAASB 2007, p. 2)

ISA 402 Audit Considerations Relating to Entities Using Service Organizations (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 95. (ICPA 2006, p. 9) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 402 Audit Considerations Relating to Entities Using Service Organizations is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 500 Audit Evidence (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 82. (ICPA 2006, p. 10) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 500 Audit Evidence is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 501 Audit Evidence - Additional Considerations for Specific Items (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 83. (ICPA 2006, p. 10) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 501 Audit Evidence - Additional Considerations for Specific Items is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 505 External Confirmations (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 84. (ICPA 2006, p. 10) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 505 External Confirmations is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 510 Initial Engagements — Opening Balances (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 77. (ICPA 2006, p. 10) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 510 Initial Engagements -- Opening Balances is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 520 Analytical Procedures (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 79 which is based on the old version of ISA 520. (ICPA 2006, p. 11)

ISA 520 Analytical Procedures is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 530 Audit Sampling and Other Selective Testing Procedures (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 85. (ICPA 2006, p. 11) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 530 Audit Sampling and Other Selective Testing Procedures is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 2)

ISA 540 Audit of Accounting Estimates (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 81. (ICPA 2006, p. 11) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 540 Audit of Accounting Estimates is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 545 Auditing Fair Value Measurements and Disclosures (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the ICPA prepared an exposure draft of the corresponding Israeli auditing standard. (ICPA 2006, p. 11) However, there is no further information publicly available as to Israel's compliance with this principle.

ISA 545 Auditing Fair Value Measurements and Disclosures is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 550 Related Parties (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 52 which is based on the 1989 version of ISA 520. (ICPA 2006, p. 12)

ISA 550 Related Parties is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 560 Subsequent Events (effective 2006)

ID

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 11. Paragraphs 8-20, 13-18, 19 of the International Standard on Auditing (ISA) 560 have been omitted from the Statement 11. As of 2006, revision of the Israeli standard had been included into the ICPA's work program. (ICPA 2006, pp. 12, 20)

ISA 560 Subsequent Events is effective for audits of financial statements for periods for periods beginning on or after December 31, 2006. (IAASB 2007, p. 3)

ISA 570 Going Concern (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 58 which is based on the 1994 version of ISA 570. (ICPA 2006, p. 12)

ISA 570 Going Concern is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 580 Management Representations (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 21 which is based on the 1979 version of ISA 580. (ICPA 2006, p. 12)

ISA 580 Management Representations is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 600 Using the Work of Another Auditor (effective)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 9 which is based on the 1973 version of ISA 600. (ICPA 2006, p. 12)

ISA 600 Using the Work of Another Auditor has no effective date and is deemed to be effective. (IAASB 2007, p. 3)

ISA 610 Considering the Work of Internal Auditing (effective 2004)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 88. (ICPA 2006, p. 12) However, there is no information publicly available as to Israel's compliance with this principle.

ISA 610 Considering the Work of Internal Auditing is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 620 Using the Work of an Expert (effective 2005)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 64 which is based on the 1996 version of ISA 620. (ICPA 2006, p. 13)

ISA 620 Using the Work of an Expert is effective for audits of financial statements for periods beginning on or after June 15, 2005. (IAASB 2007, p. 3)

ISA 700 The Auditor’s Report on Financial Statements (effective 2006)

ID

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 90 which is based on the 2004 version of ISA 700. As of 2006, the ICPA was working on an exposure draft of new Statement 90. (ICPA 2006, p. 13)

ISA 700 The Auditor's Report on Financial Statements is effective for auditors' reports' dated on or after December 31, 2006. (IAASB 2007, p. 3)

ISA 701 Modifications to the Independent Auditor's Report (effective 2006)

II

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 72 effective 2002. However, there is no information publicly available as to Israel's compliance with this principle. (ICPA 2006, p. 19)

ISA 701 Modifications to the Independent Auditor's Report is effective for audits of financial statements for periods beginning on or after December 31, 2006. (IAASB 2007, p. 3)

ISA 710 Comparatives (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 78. Paragraphs 6-19 of the International Standard on Auditing 710 and the corresponding figures have been omitted from Statement 78. (ICPA 2006, p. 13)

ISA 710 Comparatives is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 720 Other Information in Documents Containing Audited Financial Statements (effective 2004)

NC

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standard is Statement 75. The main difference between Israeli Statement 75 and ISA 720 is that the auditor must receive other information before the submission of the auditor's report. (ICPA 2006, pp. 13-14)

ISA 720 Other Information in Documents Containing Audited Financial Statements is effective for audits of financial statements for periods beginning on or after December 15, 2004. (IAASB 2007, p. 3)

ISA 800 The Auditor’s Report on Special Purpose Audit Engagements (effective 2006)

ID

According to the self-assessment prepared by the Institute of Certified Public Accountants in Israel (ICPA) in 2006 as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, the corresponding Israeli auditing standards are Statement 7 and Statement 70 which relate to special purpose audit engagement (not audit of annual financial statements) and circumstances in which auditors can give confirmation as a special report. As of 2006, revision of the Israeli standard had been included into the ICPA's work program. (ICPA 2006, pp. 14, 20)

ISA 800 The Auditor's Report on Special Purpose Audit Engagements is effective for auditors' reports' dated on or after December 31, 2006. (IAASB 2007, p. 3)