Grant Thornton launches 'first' IVA audits

Grant Thornton has launched what it describes as the first audit service to
provide assurance to creditors and lenders that IVA factories and debt
management companies are correctly following legislation and providing best
practice advice.

The launch follows adverse publicity over the behaviour of
debt management companies and IVA
factories, and comes at a time when the industry is looking to regulate
itself with help from the
Insolvency
Practitioners’ Association .

Last week, Accountancy Age revealed that IVA business
Debt free Direct was set to appoint an accounting firm to
audit its IVA processes. It was not known whether Grant Thornton is the firm in
question at the time of going to press.

Grant Thornton head of IVAs Mark Allen said there was a genuine willingness
by many operators to subject their processes and procedures to third-party
scrutiny.

Allen said: ‘IVA audits will bring certainty to the IVA market, reassure
users and lenders alike and hopefully help dispel some of the negative
perceptions that the industry has attracted in recent months. Or at least allow
their creditors to distinguish the high performers in the industry.’

The new service will also include an outsourcing division that will manage
IVA correspondence and caseloads on behalf of banks.

But to ensure independence in the audit process, the caseload outsourced to
Grant Thornton’s will be audited by a third party, as will their own cases.

However, audit of their own work will not begin until they are confident that
another accounting firm can provide such a service.

Further reading:

IVA factories to thrash out regulation by
February

Debt manager shuns new insolvency watchdog

Pressure grows on IVA factories