Insolvency code proposed
Insolvency practitioners are to get a new code of ethics
Guidelines are being finalised on matters such as transparency and
confidentiality, with the results set to be unveiled later this year.
The
Joint
Insolvency Committee undertook an extensive review of the sector to create
the code, to be released on 1 November.
The code will include issues of confidentiality and due diligence. Currently,
IPs can clash with accountancy codes that place confidentiality as paramount.
IPs, however, must place transparency as their priority to creditors when
dealing with insolvent companies or bankrupts.
Brendan Guilfoyle, chairman of the ethics committee at the
Insolvency
Practitioner Association, said: ‘In accountancy confidentiality is
imperative, but in the insolvency arena we have a responsibility to our client
which is the creditors.’
‘The code refers to formal insolvency appointments. Practitioners should not
hide behind the fundamental principle of confidentiality but be more
transparent,’ he added.
Consultation with the Insolvency bodies ended in July 2007.
The IPA, along with the Insolvency Service is hoping to issue a foreword to
be attached to the code, which is a revision of the current Insolvency Ethical
Guide produced in January 2004.