Michael.1
Insolvency and related law and policy, and more

Michael Murray is an Australian author and commentator on corporate and personal insolvency law and related issues, in Australia and internationally. He has a strong law and policy background, is independent of any connections, and his views are his own. He gives no legal advice. 

Regulation of insolvency practitioners by accounting bodies

The outcomes of co-regulation of UK insolvency practitioners are explained in a May 2020 report of the ICAEW, with some comparisons drawn with the regulation by the Australian equivalent, CAANZ.

ARITA has recently referred to the fact that Australian accounting bodies CAANZ and CPA (but not IPA) “undertake practice reviews of liquidators [who] hold practi[s]ing certificates with them”.[1]  The reports of such reviews do not appear to be made public.

It is not necessary for an Australian insolvency practitioner to be a member of one of the three accounting bodies but most are. Those three bodies have some limited statutory regulation powers under Australian law, but nothing in comparison with the UK.

In reference to the UK, the nature of such reviews by the English/Welsh accounting body – ICAEW – is shown in its  Support information – Insolvency Monitoring Report 2020 . It offers a helpful summary of ICAEW’s recent practice review of its insolvency practitioner members, although showing some trends of concern.

ICAEW licenses 805 insolvency practitioners – as at 1 January 2020 – being over 50% of the UK’s practitioners.

ICAEW is one of several insolvency co-regulators in the UK in a regulatory structure that is under review by the Insolvency Service.[2]

The role of the ICAEW is similar to that to which CAANZ aspires in relation to its regulation, with RITANZ, of New Zealand insolvency practitioners. That new NZ regime is potentially delayed until 2021, because of the COVID-19 impact, though an earlier start still seems possible.  CAANZ will need to reveal its regulatory approach for New Zealand, if it is approved, and whether or how it differs from that taken in Australia.

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[1] ARITA response to ASBFEO COVID-19 Recovery Plan, 3 June 2020. Bankruptcy trustees aren’t referred to as being reviewed. ‘Practising certificates’ are not relevant to insolvency practitioners.

[2] See Call for evidence on insolvency practitioner regulation, 12 July 2019

 

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