As you may be aware, a new Standard is about to become binding on all members of the Institute of Chartered Accountants of Australia and all members of CPA Australia.

In this regard Professional Standard APES 330 – Insolvency Services, issued by the Accounting Professional & Ethical Standards Board (APESB) in September 2009, has recently been adopted by the Institute and CPA Australia and will come into force tomorrow, 1 April 2010.

Unsurprisingly, the Insolvency Practitioners Association has not yet adopted the Standard, as it has promulgated its own Code of Professional Practice which covers the same field. We understand that the IPA is working to bring the Code into line with the Standard with a view to eventual synchronisation.

In the meantime, the Standard applies to all forms of insolvency appointments except for receiverships, and imposes requirements that are additional to the requirements imposed by the IPA Code of Professional Practice.

This means that Insolvency Practitioners who are members of the IPA now find themselves in the difficult position of having to observe both the Standard and the IPA Code.

The Standard will commence this Thursday and compliance with the paragraphs printed in bold type is mandatory.

One key difference between the Standard and the IPA Code is found in paragraphs 3.7 and 3.8, which are printed in bold and are therefore mandatory provisions. These provisions require, among other things: –

§ that, where an insolvency appointment is likely to involve the Insolvency Practitioner requiring legal or other professional advice or assistance, the Insolvency Practitioner must seek that advice from a “suitably qualified” third party – or decline the appointment altogether; and

§ that, where such advice is sought, the Insolvency Practitioner must assess the “professional competence” of the advisor and be satisfied that the advisor has the relevant expertise; and

§ that the Insolvency Practitioner must disclose to creditors “in any reports or other relevant communications” the identity of the person or firm from whom advice or assistance was sought.