Cork Materials: The Suitability of Persons Authorised to act as Liquidators and Trustees

The Association of Authorised Public Accountants (AAPA) had learned of the reluctance of the Insolvency Law Review Committee to specify which particular associations’ members should be entitled to act as liquidators, trustees and receivers. On March 17th 1981, S.A. Coxhead, Secretary of the AAPA sent a letter to the Committee putting forward an unequivocal claim as being the body whose members ought to be regarded as qualified for such appointments.
The AAPA offered the following assertions as evidence:

- “Without exception, all members of the AAPA are statutory recognised accountants under the Companies Act 1948, Section 161(a) or (b), many of whom are presently acting as Liquidators and Trustees. All members are, from time to time, accepting such appointments as part of their livelihood and on behalf of their practices.”

- “Members of AAPA are subject to a Committee of Discipline, on which are serving representative members of the English Institute and the Certified Association. Members are also issued with a Practising Certificate when they have complied with the standards of professional competence and modern technical standards equivalent to the Institute of Chartered Accountants and the Certified Association.”

- “The full Technical Service of the Certified Association, as provided to the members of the Certified Association, is provided to all AAPA members and it is now fully authorised under the companies Act 1948 as statutory auditors.” Thus, all AAPA members are subject to “the same criteria of professional ethics and technical standards as are members of the Institute and the Certified Association.”

The AAPA then enclosed a copy of the association’s Memorandum and Articles of Association in order to substantiate the fact that “AAPA members are fully equated to all other recognised statutory accountants, both in theory and practical application.”

Nonetheless, the Committee did not hearken and may be with good reason. There are many other professional bodies that meet these conditions. Thus, in order to ensure the suitability of persons authorised to act as trustees, administrators or liquidators, the Insolvency Act 1986 introduced an authorisation process whereby only persons authorised to act as insolvency practitioners may be appointed as trustees or liquidators in place of the official receiver. Authorisation is made by the Secretary of State or by one of the seven professional bodies recognised by the Secretary of State as being competent to make such an authorisation. One wonders whether the AAPA would have had the resources required to regulate and maintain the standards of performance and conduct of all persons that act as trustees or liquidators. It is worth mentioning that the AAPA is a member of the European Federation of Accountants and Auditors for small and medium-sized enterprises, an organisation that comprises accountancy bodies whose members provide services to small and medium-sized enterprises. Moreover, in June 1996, the AAPA became a subsidiary company of the Association of Chartered Certified Accountants.

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