In its submission to the Insolvency Service consultation on regulatory reform, the recognised professional body (RPB) said no evidence had been offered by the Insolvency Service, or the Office of Fair Trading (OFT), to demonstrate “failings in the current system.”
The consultation followed the OFT market study into insolvency and its regulatory framework last year. It invites views on whether an independent complaints body should be established and sets out four models for how it could operate.
But the ICAEW said that the cost of such a body, which would likely be passed on to creditors, “appears to have been significantly understated in the impact assessment”.
Vernon Soare, executive director of professional standards at the ICAEW, said: “The economic recession has resulted in a rise in insolvencies so it’s little wonder insolvency practitioners are being put in the spotlight.
“ICAEW believes that the regulation of insolvency work must be robust and that any proposed changes should be evidenced-based, which is why we support some, but not all of the recommendations made by the Insolvency Service”.
The ICAEW said it supported changes to the regulatory framework including independence in the standard setting process.
It also backed the introduction of regulatory objectives against which the regulatory regime may be assessed.
Like other RPBs, the ICAEW supported the proposal that the Insolvency Service should stop authorising individual insolvency practitioners directly, because of the tension between the role of regulation and oversight.
Soare added: “We are supportive of any measures that will help improve transparency and confidence in insolvency procedures providing they are practical and do not add costs into the system.
“The key will be to ensure that any proposals are well thought out and evidenced based”.