For many years now there has been much debate about regulation among Insolvency Practitioners which has become more prevalent in recent times.

The once niche market has experienced an influx of accountants claiming to have the relevant experience and knowledge to carry out liquidation work when in reality many are not only lacking knowledge but also experience.

One of CARB’s proposals is to introduce a Designated Practising Certificate where the applicant must achieve a minimum of 150 hours of acceptable insolvency experience along with completing the required number of structured CPD hours. The reasoning behind this is to ensure that Chartered Accountants who are accepting appointments have the necessary experience and competence to provide a high quality service in line with that expected of a Chartered Accountant.

Those who obtain the relevant experience in this area will be branded as Regulated Insolvency Practitioners. The plan is to achieve this through the introduction of a Designated Practising Certificate for Insolvency Practitioners who act as:

• Members Voluntary Liquidator,
  
• Creditors Voluntary Liquidator,
  
• Provisional Liquidator,
  
• Official Liquidator,
  
• Receiver,
  
• Examiner,
  
• Court Appointed Receiver,
  
• Sequestrator,
  
• Agent for Debtor in Possession,
  
• Administrator,
  
• Advisor in a Scheme of Arrangement under the Companies Act and Advisor in Reconstruction or Recovery.

However, one has to ask who will benefit from this? Yes, you can argue that the Insolvency professional who is under the umbrella of Chartered Accountants Ireland will be held in high regard and will have the required skill set to complete his or her duties, but what about every other insolvency practitioner not associated with Chartered Accountants Ireland.

The second proposal is to introduce an increased quality assurance process to include desktop monitoring through the completion and submission of a detailed Annual Return and Monitoring Visit. The introduction of an annual return will ensure compliance with the relevant regulations along with assessing risk and reviewing a firm’s internal quality control procedures. Insolvency Practitioners will also be asked to carry out an annual compliance review of their own.

It is clear that a market which may have once been considered lucrative in previous years is now under increased competition. Insolvency Practitioners over the last two years have seen rates fall significantly as a result of clients wanting value for money. This recession has brought with it an increased focus on value for money no matter the industry. With the insolvency market now effectively over-populated one has to ask is it feasible, practical and fair?

While any move by CARB is a welcome move, it seems that this will not solve the problem of ‘rogue’ Insolvency practitioners. This will ultimately have to be addressed by the Government.

http://insolvencyjournal.ie/home_more_details/11-10-28/The_Regulation_of_Liquidators.aspx