Amendment to Proper Conduct of Banking Business Directive no. 304A regarding PCAOB audit standards

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Bank of Israel
Banking Supervision Department
On-site Division
October 13, 2016
Circular no. C-06-2512
Attn:
Banking corporations and credit card companies Re: Conducting audit and review in accordance with certain standards set in the US (Proper Conduct of Banking Business Directive no. 304A) Introduction

1. Proper Conduct of Banking Business Directive 304A on the issue of “The external auditor—
   performing audits and reviews in accordance with certain US standards” (hereinafter, “the Directive”) establishes that audits of banking corporations’ financial statements are to be conducted, among other things, in accordance with certain audit standards established by the Public Company Accounting Oversight Board (hereinafter, “PCAOB”) in the US.
2. In light of the publication of additional audit standards by the PCAOB, the need arose to update
   the Proper Conduct of Banking Business Directives. In view of the aforementioned, and after consultation by the Supervisor of Banks with the Institute of Certified Public Accountants in Israel’s Liaison Committee and with the Advisory Committee on Banking Business Affairs, and with the approval of the Governor, it was decided to amend the Proper Conduct of Banking Business Directive as specified below. Changes to the Directive
3. Section 2(l) is to be added to the Directive’s Appendix on “PCAOB audit standards”, as
   detailed below:
   (l) AS18—Related Parties
   Explanation
   This is done in order to adopt the audit standard published by the PCAOB . Effective date
4. The provisions of this circular shall go into effect with the audit of the financial statements for
   Decmber 31, 2016 and onward.
   Update of file
5. Update pages for the Proper Conduct of Banking Business Directive file are attached. The
   provisions of the update follow.
   Remove page Insert page
   304A 1-9 [various versions] 304A 1-9 (10/16) [6]

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Respectfully,
Dr. Hedva Ber
Supervisor of Banks