A topic that causes a lot of uncertainty in the profession is that of insolvency, mainly because there are different types of insolvencies that must be considered by the accounting professional.

Accounting professionals also have a duty to report these insolvencies whilst performing certain types of engagements.

Information about these insolvencies and how to deal with them are not always readily available, therefore I have decided to put together this presentation in order to assist practitioners in this regard.

Content:

During this presentation I will be answering the following questions.

What is the difference between the following?

• Technical or factual insolvency
  
• Commercial insolvency
  
• Financially distressed
  
• Going concern problems
  
• Fraudulent or reckless conduct
• Common law fraud
  

When does any form of insolvency becomes an irregularity?

When does insolvency constitute an offence or infringe a statutory or common rule?

When should the auditor report insolvencies?

When should the independent reviewer report insolvencies

When should the accounting officer report insolvencies?

When must the directors of a company perform a solvency and liquidly test?

Under which circumstances will the Commission issue a notice to a company to cease trading?

What effect will the following have on the insolvency position of a company?

• Subordination agreements
  
• Letter of comfort
  
• Guarantees
  
• Letter of support
  

What type of liability could an auditor, independent reviewer, accounting officer or director of a company of a director incur for not dealing in an appropriate manner with any form of insolvency.