On Civil Liability Of False Vertification By Vertification Agency During The Establishment Of Company

The third person is authorized to ask for compensation from the verification agency who provides the false verification reports intentionally or by mistake and thus does harm to the third person. It is clearly formulated in"People's Republic of China Law on Certified Public Accountants","PRC Securities Law","PRC Company Law","Independent Auditing Standards"and a series of judicial interpretation. This issue seems rather simple, but it leads to many scholars'discussion and even puzzlement in the judicial practice.The Verification Agency should undertake the civil liability for providing false verification report. It is an undisputed conclusion. But there are still a lot of different understandings and arguments on how to define the fault, how to find out the relationship between the damage of the third person and the false verification and how to determine the falsehood of the verification and its limitation.Based on the civil liability of false verification, this paper analyzes the verification system in China and the reason of the different understandings about false verification between the legal profession and the accounting profession, and therefore claims that a liability model consisting of bailer, verification agency and the third person should be set up to assign each one's authority and duty fairly. Some suggestions about false verification lawsuit are put forward, including setting proper limitation, establishing corresponding authenticating organization, improving the legal regulation and endowing the legal status to"Independent Auditing Standards".