New Bankruptcy Act

Source: Accounting Today

The Bankruptcy Reform Act, signed by the president in April, becomes effective in October 2005. It will affect accountants in both its personal and commercial aspects. The audit requirements of the Act become effective in October 2006. This part of the Act will have the biggest impact on accountants. It requires all information submitted by a petitioner in bankruptcy to be audited. The audits must be performed in accordance with generally accepted auditing standards by independent accountants. The audits will focus on determining whether there have been material misstatements of assets, income, or expenditures

The Act has major implications for personal bankruptcies, and some of its rules may provide opportunities for accountants. A person planning to file a bankruptcy petition will be required to obtain a certificate from an approved nonprofit credit counseling agency, and after filing must have financial management training. That could be an opportunity for accountants. The Executive Office for United States Trustees will direct the development of training materials.

For the complete details, including information on specific provisions of the Act and how they will affect financial advisors, see Accounting Today, May 16-June 5, 2005, p. 5, or click on the following links: http://www.webcpa.com/article.cfm?articleid=12891&;pg=acctoday http://www.webcpa.com/article.cfm?articleid=12892&;pg=acctoday