What bodies oversee company liquidators in Australia?

Estimated reading time: 5 minutes Small Business Restructuring, Voluntary administration, Company liquidation

As with any profession, it is crucial that there is some level of oversight of the actions of insolvency practitioners. This is the only way to ensure that they are living up to their professional and legal standards.

Ilustration - what bodies oversee insolvency practice in Australia?

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Here we look at the oversight of the profession in Australia, as carried out by ASIC, professional bodies, creditors and the Court. We also compare it with the new co-regulatory model that has been introduced in New Zealand.

ASIC’s role as primary regulator

The Australian Securities & Investments Commission (ASIC) is the primary regulator for insolvency practitioners in Australia. Historically, ASIC has been seen as quite inactive in this aspect of its job. However, with new enforcement tools and a budget to match, we have been told to expect more enforcement activity.

There is now a funding model in place that allows ASIC to charge fees to liquidators to fund regulatory actions – something many liquidators are not so happy about.

Nevertheless, from what we can see thus far, ASIC still seems focused on ‘black letter’ compliance with filing requirements, not substantive concerns. This reflects, perhaps, the ease of investigating that kind of behaviour.

In an in-depth analysis from QUT law academic, Elizabeth Streten, interviews with insolvency practitioners revealed a general dissatisfaction with ASIC’s recent approach to enforcement. As one interviewee put it:
“it’s almost like entrapment … there’s so many lodgements and if somebody misses one they get shot …”

While it may be hard to feel sympathy for one of the highest paid professions in Australia, arguably recent changes to the oversight framework have had an impact.
Australia does not have that many liquidators – only 652 as at 30 September 2021. But notably, 75 have quit in the last 2 years. The evidence would suggest many are avoiding insolvency appointments with the expectation of rough treatment from ASIC (see ASIC Insolvency Statistics, Table 4.2).

In addition to enforcement, another crucial component of ASIC’s oversight is the tightening up of the registration process. They now require many more documents than previously and the process has a higher failure rate due to a robust interview process. This is part of a push for professionalism.

For more information see ASIC’s regulatory guide, RG258, including the requirement for a 100 page application with a complete work history.

How much does ASIC intend to do?

According to page 40 of the cost recovery guide linked to above, the regulatory cost of ASIC regulating liquidators is $6.677m. Divided by 652 liquidators, this means $10,240 per liquidator. This is no paltry sum, and may indicate that ASIC intends to be quite active. On that same page, ASIC notes its surveillance of high risk liquidators and disciplinary action as priorities.

It appears that there is not a lot of confidence in the profession on the part of ASIC. Presumably, ASIC is sizing up the profession and working to root out the rogues — the irony being, of course, that it is liquidators themselves who pick up the tab.

ARITA’s role

The Australian Restructuring, Insolvency and Turnaround Association (ARITA) also has oversight of (many) insolvency practitioners.

Note, this is a private professional association, not a public body.

ARITA applies a Code of Conduct to its members, which covers 80 percent of practitioners in Australia. The code is a fair guide to a practitioner’s obligations, with a focus on independence and impartiality.

In the past, Australian courts have considered the ARITA Code when evaluating the professional standards of insolvency practitioners (though note Korda, in the matter of Ten Network Holdings Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2017] FCA 914 calls this practice into question).

While ARITA is arguably an effective advocate for its members (equivalent to a trade union in many ways), it is opposed to any debtor-in-possession systems and any other significant changes to the insolvency system in Australia.

Besides its authority over members, and the use of its code by the courts, ARITA has a designated seat on the registration and disciplinary committees for liquidators convened by ASIC. In light of this, it is arguable that many members keep up their membership to curry favour with the ARITA representative.

Chartered Accountants Australia and New Zealand (CAANZ)

Insolvency practitioners are trained accountants, and as recognised accountants they are members of accountancy professional bodies. CAANZ has oversight of insolvency practitioners primarily though its Code of Ethics and APES standards (especially APES 330 Insolvency) which apply to all members.

Some insolvency practitioners (those registered as restructuring practitioners) are required to be ‘recognised accountants’ which mandates membership of one of the key professional accounting associations in Australia.

It is worth noting that disciplinary action is rarely taken by CAANZ or other accounting asssociations against their members.


Creditors obviously have significant oversight of the liquidation process through mandatory liquidator reporting and creditor’s meetings. But creditors can also convene ‘committees of inspection’, replace liquidators and appoint reviewing liquidators as mechanisms for overseeing a liquidation.

You can read more about the creditors’ role in the Ultimate Guide to Liquidation Part 3: Responding to Liquidation.

As the biggest creditor in many liquidations, the Australia Tax Office (ATO) is a major actor here (see for example, the Iannuzzi case). The ATO seems to have a strategy of taking on one or two insolvency practitioners each year with the intention of positively influencing the group as a whole.

Court oversight

There are powers under the Corporations Act 2001 (Cth) for the Court to oversee insolvency practitioners. These provisions are rarely used, however, as in practical terms, a creditor would need to bring action (and therefore fund it themselves). Where court action does occur, it is very likely to be pursued by ASIC or ATO.

The typical method of Courts for punishing an insolvency practitioner is making a costs order against them in Court proceedings where a liquidator has themselves brought action. This is a sensitive area for liquidators as they may need to personally fund ill-conceived litigation.

Comparison with New Zealand

New Zealand recently adopted a new ‘co-regulatory’ model for the insolvency profession. This means that government bodies (the Companies Office and MBIE) set minimum standards and hold key registers. But frontline regulation is carried out by ‘accredited bodies’, currently only the New Zealand Institute of Chartered Accountants (NZICA). Note, oversight applies even to those individuals who are not members of NZICA.

In effect, the professional association for accountants is carrying out what would be ASIC’s role in Australia. 


Are the days of the ‘do nothing’, underhanded, overcharging and unprofessional liquidator over? Perhaps so – there are increased professional requirements coming from multiple actors. In turn, liquidator expenses are likely to be higher for compliance going forward. Hopefully, new entrants to the industry are likely to be more professional due to increased registration requirements and oversight.


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