The independence principle has to be upheld. Companies have to get used to the fact that regulatory requirements prohibit their auditors from assisting them in preparing their financial statements.

Our firm understands the importance of the independence principle and renders financial statement preparatory services to companies, as a preliminary stage to the auditors' report or review report.


Recently, the Israel Securities Authority issued a draft clarification for public comment concerning the independence of the auditor regarding the preparation and presentation of financial statements for the audited company. The position of the Authority is that when such assistance is provided, the obvious price is a lack of independence, and therefore, such financial statements will no longer be considered to have been audited or reviewed as required by law and will not be recognized for purposes of the Securities Law and its regulations.

Financial statement preparatory services

The objective of the service is to prepare annual and quarterly financial statements in accordance with the requirements that apply to publicly-traded companies. For all intents and purposes, the service relates to public companies and their subsidiaries and affiliates. The service is provided in complete cooperation with the company's auditors, with whom we will discuss and resolve various accounting issues that may arise during the course of the preparation of the financial statements.

Our firm operates in accordance with the concept that believes that the financial statements are an important management tool. Accordingly, we will devote time to attain an in-depth understanding of the Company, its characteristics and business environment. In addition, we will coordinate expectations with the auditors of the Company.

For purpose of carrying out the task in an efficient manner, our firm proposes that the work take place on the basis of the following work phases:

  •  Understanding the Company's characteristics and business environment
  • Receipt of a trial balance and the necessary schedules as of the cutoff date
  • Calculation of deferred taxes, the theoretical tax and the provision for taxes
  • Preparation of a cash flow statement
  • Consolidation of financial statements (if necessary)
  • Preparation of schedules for the financial statements
  • Typing the financial statements, including the note on significant accounting policies and other wordy notes (accounting policy, contingent liabilities and commitments, guarantees and liens) in accordance with the requirements of the Company and its auditors
  • Submission of the financial statements for the review of the Company and its auditors, and providing answers and solutions to questions raised by the auditors on a regular basis
  • When necessary, updating the financial statements in accordance with the demands of the Company and its auditors

Financial statement preparation department

Our firm's financial statement preparation department was recently set up in response to the requirements of the law. The department renders financial statement preparation services to a broad range of companies in various industries. The service is provided by, among other people, experienced audit managers who have extensive know-how and experience in preparing and auditing financial statements in accordance with the securities law and its regulations, as well as in accordance with IFRS and US GAAP, as applicable.

The service rendered by the department is based on personal involvement and contact with the client and is provided on a regular basis to companies who request detailed accompaniment. The clients are able to benefit for the rich experience amassed by the department in the field of financial statement preparation.

As part of the services provided, we utilize the capabilities and know-how of the other departments of the firm, which include:

The technical department – the staff of the department has extensive professional know-how and broad expertise in the gamut of Israeli, U.S., and international accounting standards. Among its other duties, the technical department invests considerable time and effort in learning and researching professional material and Developments occurring therein, in providing

solutions to technical issues in the fields of accounting and financial reporting.

The tax department – the staff of the department consists of certified public accountants, attorneys, and experienced tax experts. The department provides comprehensive consulting services in all areas of taxation, including: corporate taxation, partnerships, and not-for-profit organizations, individual taxation, international taxation, transfer pricing, indirect taxation, structural changes, etc. The department has extensive experience in handling complex tax issues and in accompanying investment transactions and activities in Israel and abroad.

יניב בן ברוך
Partner, Head of Professional Department
Yaniv Ben Baruch