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Q&A

What is the function of a Certified Public Accountant (CPA)?

The function of a CPA comprises a large number of fields and activities. The most classic field is the auditing of financial statements of companies and not-for-profit associations, and tax consulting. But, in present times, the function of a CPA includes many additional fields and activities, and is generally the main address for all financial – business consulting. In addition, we believe that performing the auditing work the auditor must have skilled thought processes, analytical ability and common sense.

What other services can a CPA offer apart from auditing and tax consulting?

The CPA assists in preparing financial statements, constructing international tax structures for foreign operations, carries out due diligences and evaluations, offers bookkeeping and payroll services, prepares annual returns to the tax authorities, and consults on legal and other subjects.

At present the CPA’s are already in theory and practice, the right hand of a businessman in everything connected with financial management and assists him to plan his steps in the taxation field in a wise and intelligent way.

Who is a CPA?

A CPA is a person who received a license to engage in accounting and auditing from the Israeli Accountancy Council. Receiving a license requires academic accounting studies, two years of apprenticeship and successfully passing the Council’s examinations.

Must I employ the services of a CPA?

This depends, a self-employed person and an employee does not need to employ a CPA, but for the purpose of submitting an annual return to the tax authorities (perhaps for tax repayment purposes) it is recommended to request the assistance of a CPA in order to report correctly and fully and to avoid errors which are liable to be expensive.

On the other hand, a company must employ the services of a CPA for the purpose of auditing the annual financial statements.

Is there an obligation for general reporting in Israel as in the US?

Correct as of today, no. But there is an intention to impose an obligation of general reporting in the economy which will require the whole population to submit an annual return on their income to the tax authorities, although no such proposed law on the subject has yet been presented.

We recommend consulting and examine whether in your circumstance the submission of a tax return to the tax authorities is required.

I wish to carry out a business step, is it advisable to consult with a CPA?

Definitely yes. Every significant business and even individual step (such as the purchase / sale of an apartment) is accompanied by financial and tax aspects which are likely to affect performance of that step. Therefore, it is recommended to consult with a CPA in order to obtain the “full picture”, to correctly plan the step-in advance, and to avoid future errors and mistakes, which are liable to be expensive.

What is the difference between a tax consultant and a CPA?

The differences are considerable and serious in everything connected with the period of study and the level of training, the know-how and authority. In short, a qualified tax consultant is to provide services to individuals only and not to companies, and cannot offer auditing services. A CPA also handles both individuals and companies and is responsible to submit “audited financial statements” of the company.

How should I choose a CPA?

A CPA is a person who will be involved in your most significant business decisions and in general to assist you in managing your financial resources. By virtue of this, he is a person who thoroughly knows about business and private aspects.

Therefore, it is recommended to engage the services of a CPA who will be recommended by family and/or friends and/or people on whose advice you can rely.

Prior to engaging the services of a CPA, it is recommended to have an acquaintance meeting in order to check if there is a meeting of the minds, good communications and mutual understanding, in order to advance further and start to work together.

Is submitting a return for tax refund likely to be relevant for me?

This depends whether you are an employee and has worked in at least two places of work during the year, or you did not work for part of the year, or that you think that you did not receive the full credit points to which you are entitled from income tax (student/parent/new immigrant/returning resident/invalid, etc.), it is worthwhile to check your entitlement to a tax refund for that year.

I received a notice from the tax authorities that I must submit a tax return. Should I submit it myself or is it advisable to contact a CPA?

In every case of a demand or notice from the tax authorities, we recommend that you consult with a CPA. In view of the experience and know-how that a CPA has, and particularly everything relating to contacts with the tax authorities, it is worthwhile to consult with him prior to responding to the tax authorities or having any contact with them. Completing forms and reports often require taking careful notice of the small details, and sensitive subjects such as salaries and assets, it is recommended to complete the form being accompanied by a CPA in order to avoid any misunderstandings or any errors.