BusinessBusiness RecoveryInsolvency profession slams regulators

Insolvency profession slams regulators

Practitioners have voiced overwhelming disapproval at the fragmented nature of regulation in the insolvency profession.

A survey conducted by R3, the business recovery association, found that almost two-thirds of those polled said they would not choose any of the existing regulators to become the profession’s only watchdog.

A total of 59% voted against the current clutch of regulators, which includes the ICAEW, ICAS, the Law Society, the Insolvency Practitioners Association and ACCA.

Further discontent with the current regulatory system was revealed when 78% of R3 members voted against the current fractured nature of insolvency regulation, and opposed the introduction of a single watchdog which would oversee the profession.

As a direct response, R3 president Gareth Hughes said he would now take the issue up with the department of trade and the other licensing bodies.

‘The big message is that by a reasonable majority they do not think the present system is effective or fair.’

There has been serious unease surrounding the governing of the insolvency profession with frequent talk of reform. Hughes, however, was unwilling to predict the consequences of bringing up the issue.

Of the 416 R3 members who took part in the survey, only 14% felt that the ICAEW should be the single regulator for the profession, while 24% backed the Insolvency Practitioners Association.

If R3’s intention is to provoke a reform of regulation, the body and its president could find itself facing an uphill battle.

A spokesperson for the department of trade’s Insolvency Service announced this week there were ‘no planned changes to the regulation of insolvency practitioners’.

This doesn’t mean there will not be change in the future, so for now, the way remains open for R3. But the body will need to put a compelling argument before Desmond Flynn, head of the Insolvency Service, and it no doubt hopes the recent survey will prove to be vital ammunition in the debate.

Email comment@accountancyage.com.

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