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This issue contains updated guidance on Insolvency Compliance Reviews; the latest bulletins from HMRC and our Quality Assurance webinar which contains information on current areas of particular focus and recurrent issues you should be aware of.

Quality Assurance 2020 webinar

In our recent quality assurance update we highlighted some of the recurrent issues that we see during our monitoring visits and also some areas of particular focus with insolvency regulators at the present time. A reminder that the webinar is available on our website in case you missed it.

2020 Insolvency Monitoring Report

You can also read our 2020 monitoring report for information on recurrent issues and  guidance on how to avoid them.

Insolvency Compliance Reviews updated guidance

During our quality assurance webinar we addressed a question that a number of IPs have asked us; whether we are relaxing the requirement for IPs to carry out an ICR in 2020.

In the webinar we explained that we weren’t, and that arguably it’s more important than ever that IPs carry out an ICR this year; given staff may have been furloughed for a period, or may have been working remotely.

However given the further period of lockdown announced on 31 October, expected to go through to 2 December, we have revisited this approach.

2020 Insolvency Compliance Reviews extension

We are aware that a number of IPs had external ICRs booked for November and December 2020, and that some IPs had internal reviews scheduled by their risk and compliance teams between now and the end of the year. We appreciate that it may now be difficult for these reviews to be carried out. Where reviews can be carried out remotely, either because a firm has a soft document management system, or can provide the reviewer with hard copy files, we’d encourage IPs to ensure that these reviews go ahead, particularly as the last few months have been anything but usual, so it’s important to check that the firm’s processes have been followed.

However we accept that some IPs will be subject to restrictions preventing them from accessing their offices over the next month. In those cases we acknowledge that it may not be possible now to conduct an ICR before the end of the year. Given these circumstances, we are extending the period for completion of 2020 ICRs until 28 February 2021. However please bear in mind that any ICR deferred into early 2021 will be your 2020 ICR and you will also need to complete a further ICR in 2021.

If you hadn’t already booked an external review for 2020 and were planning to carry out your own review, or asking a fellow IP to carry out a review for you, this should still be feasible. And there are checklists available to enable you to review cases in sufficient detail for an ICR; these cover all case types, including moratorium cases.

If you believe it will not be possible to complete a scheduled ICR between now and 31 December, you should email insolvency@icaew.com and confirm when the ICR had been scheduled for; who was due to conduct it, and the rescheduled date.

Have you trained your staff on the revised code of ethics?

We are aware that a number of IPs had initially planned to provide staff training on the revised insolvency code of ethics in the spring, ahead of the code’s implementation on 1 May 2020. Given lockdown those plans had to be shelved and it appears from our recent visit findings that some IPs have failed to pick this up in the intervening months.

It’s now six months since the revised code came into force, and if haven’t already provided your staff with training and updated your documentation, it’s crucial that you do so without a further delay. Increased familiarity with video conferencing over the past six months should enable you to do some online training, and as a starting point, you can use the code of ethics webinar we produced last November. But don’t just send your staff links to that, and to the revised code. Ask them to confirm they have watched the webinar and read the code, ensure you collate their responses and chase them up if necessary. Or you could watch the webinar together and have a team discussion to discuss the effects and implications of the key changes.

Our webinar was never intended to be standalone training for IPs and their teams and was intended to be an adjunct to in-house sessions, but you may find it useful to get the ball rolling.

If you haven’t provided staff training by the time you have a monitoring visit, this will feature in your closing record, and we’ll be expecting your response to confirm when you will provide training and how. As further time passes, there may be more serious outcomes for IPs who haven’t addressed this.

If you haven’t already done so, you should also review your ethical documentation to see if it needs changing to reflect the changes in paragraph 2130 of the code. You now need to document:

  1. The facts.
  2. Any communications with, and parties with whom the matters were discussed.
  3. The courses of action considered, the judgements made and the decisions that were taken.
  4. The safeguards applied to address the threats when applicable.
  5. How the matter was addressed.
  6. Where relevant, why it was appropriate to accept or continue the insolvency appointment.

You also need to ensure that you are documenting the reasons for choosing a particular service provider. So if you and your staff aren’t up to date with the revised code, you are likely to be missing this when you appoint an agent or lawyer on a new case.

Support and develop those who support you: The ICAEW Certificate in Insolvency

With an anticipated increase in business for insolvency practitioners as the government’s support measures slowly start to unwind, now is the time to ensure you develop those staff who support you and manage your cases on a daily basis.

BPP had been the ICAEW Certificate in Insolvency (CII)’s sole Partner in Learning since the qualification’s launch over a decade ago, but increasing student registrations have attracted other interest. We are delighted that since June this year, Neil Taylor Insolvency has also been teaching the CII. And from 2021, Insolvency Support Services will also start teaching this qualification, giving candidates a choice of three tuition providers.

From 2021, all three tuition providers will include the moratorium procedure in their learning materials in accordance with the new 2021 syllabus. CII assessments will test the revised syllabus from July 2021.

The benefits to your staff of studying for the CII

The ICAEW Certificate in Insolvency is the most flexible insolvency learning programme in the UK.

It is equally beneficial for experienced and inexperienced staff, and suitable for finance, legal, and other professionals, without compromising the commitments of your practice.

With the introduction of the moratorium provisions in the syllabus it will bring candidates right up to date with current insolvency legislation and guidance.

  • Even more choice: With three partners in learning, students can choose who to study with
  • Even more flexible: Our partners in learning provide various teaching options including interactive and on-demand webinars as well as 1 to 1 learning
  • Even more convenient: New this year, assessments can now be sat remotely and candidates can book assessments 24/7 to be sat at a location of their choice, including their home
  • Insolvency guidance: Students also receive complimentary membership of the ICAEW Restructuring & Insolvency Community
  • Future learning: ICAEW Certificate in Insolvency students don’t pay a registration fee for JIEB when sitting it through ICAEW or for sitting the ICAEW Certificate in Finance, Accounting and Business (CFAB) exams.

Or contact: alison.morgan@icaew.com

HMRC bulletins

Updates from around ICAEW

Apply to serve on the ICAEW Regulatory Board

Help us protect the public interest. The IRB has vacancies for an ICAEW member and two lay members. Closing date for applications is 27 November.

Regulatory news

Stay up-to-date with the latest regulatory and disciplinary news from ICAEW.

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