Questions for insolvency
Insolvency, like audit, has to think carefully about how they want to be perceived by the general public
SKEWED PERCEPTIONS of their role by business and the general public… a feeling that they’re pretty much a self-interest group… new regulation a certainty… We’re not referring to the audit profession, but insolvency. The government is looking to gift creditors more power: to question insolvency practitioners’ fees; and to influence how they sell the company.
The problem is that to a great extent many mechanisms are in place for creditors to stick up for their rights anyway.
Plus, the addition of another complaints body seems like a simple case of red tape, and further confusion. Will the institutes lose an aspect of their self-regulation? With the current accounting watchdog, the AADB, unhappy with its lack of control of cases, will this insolvency complaints body work differently? Unfortunately, questions without answers.
As with audit, perception is key. If more transparent processes are put into place then just maybe a greater understanding and appreciation of insolvency practitioners will follow. Such has been argued about the lot of auditors. The problem with all this is that having everything out in the open is dangerous. Auditors’ clients for one don’t want all the details coming out about their discussions – they could lose their competitive edge.
The same goes for the work of insolvency practitioners. IPs have to move quickly and under the radar to bring about deals.
Both professions have to think very carefully about where they want the line to be drawn, or forever face misunderstanding of what they do.