Select group of receivers earning up to €2m per year in fees
A select group of receivers and liquidators are receiving annual fees of up to €2m a year, but most in the insolvency industry only earn tiny sums, a report expected to be published today will show.
Five individuals earn fees of between €1m and €2m a year, although this sum is reduced when they pay ancillary staff and other costs, industry sources insisted last night.
The figures will be contained in a report on the insolvency industry from the Chartered Accountants Regulatory Board (CARB), which was in the headlines this week for taking action against audit firm Ernst & Young.
Data culled from members of the chartered accountants' industry asked insolvency practitioners what their total fees were expected to be in the coming year. Ten individuals estimated fees of between €500,000 and €2m were possible.
However, the CARB is likely to emphasise that most of those doing insolvency collect tiny sums for their work.
For nearly 200 practitioners the expected fee income from insolvency work was €2,500 or less, the group will emphasise. These individuals are usually accountants, doing other work too.
The lack of regulation of the insolvency area has started to concern many as the sector is growing rapidly and receivers and liquidators often handle millions of euro in money as part of their job.
While Irish company law includes very specific provisions regarding the conduct of insolvency experts, there are no specific educational qualifications required.
The report will state that the work tends to be carried out by a fairly limited group of individuals, and traditionally court work has only been allocated to those who can demonstrate a lot of experience and have an established reputation.
"However, the increased quantity of insolvency work now available in Ireland would suggest that non-experienced practitioners are now entering what is a very technical insolvency market.''
The CARB is expected to point out that auditing and investment advice are both reserved activities, meaning practitioners don't need a specific qualification to practise in the area, although some of the accountancy bodies do insist upon this.
The survey of the industry showed that more than 200 practitioners undertook two or less appointments a year, highlighting that most of the work goes through a small circle of practitioners. The lack of experience of new entrants is also increasingly being highlighted.
The organisation is also going to float the idea that inspections and continuing training and education should be demanded of insolvency experts. Many in the industry already approved of this.