Page 17 - Bankruptcy Volume 1

Chapter 2

Scope of This Practice Aid

Cases involving bankruptcy, insolvency, and reorganization account for a significant segment of busi-
ness conducted by practitioners. These specialized consulting services are critical in assisting attorneys,
debtors, creditors, equity holders, courts, and other parties in interest throughout the bankruptcy or out-
of-court restructuring process. This practice aid provides nonauthoritative guidance to assist practition-
ers in understanding the bankruptcy process and the consulting roles that they can play in that context.
This practice aid sets no standards for the performance of such engagements.

Practitioners also provide audit, other attestation, tax compliance and general consulting services to a
company undergoing a bankruptcy or restructuring. Although this practice aid may assist such individu-
als in establishing an understanding of the bankruptcy process, financial statement reporting require-
ments and the procedural matters described previously, it is not intended to provide guidance regarding
the provision of audit, other attestation, tax compliance and general consulting services unrelated to a
bankruptcy or reorganization.

Though individuals and municipalities also may file bankruptcy, this practice aid is directed towards
bankruptcy and reorganization services in connection with for-profit entities. Restructurings of corporate
entities can occur either out-of-court or in a bankruptcy or other court-supervised proceeding. The bulk
of this practice aid focuses on the Chapter 11 reorganization process, though Chapter 7 liquidations as
well as other proceedings and alternatives are also addressed to a certain extent.

As business has become more global, so has the practice of insolvency. The bankruptcy law has also
evolved to contemplate coordination of multiple proceedings in different international jurisdictions. This
practice aid addresses the application of bankruptcy law and accounting standards in the United States as
they apply in these situations but does not address law and standards in other countries.

This practice aid is one volume of a two-part series. The companion practice aid, Valuation in Bankrupt-
cy, addresses business valuation in bankruptcy. As such, users of this practice aid may be referred to the
Valuation in Bankruptcy practice aid for a more in-depth coverage of certain valuation-related subjects.

© 2020 Association of International Certified Professional Accountants 15