Certified Public Accountant In China A Third Party Civil Liability Study

The civil liability against Certificated Public Accountant (CPA) is a worldwide problem, and also a hot topic in recent years. Especially with the eruption of a series cases, many CPA bacame the defendant. The public begin to question the credibility of the CPA and focus on the specific issue of the civil liability of CPA.In china, the only few legal provisions concerning the civil liability isessentially useless due to lack of feasibility. Since 1996, we have achieved great progress in this field, but there are still some questions to be solved. The protection to the third party is not resolved. This paper mainly focuses on the civil liability of CPA to the third party, and mianly discuss on the nature of the civil liability, the standard of duty and the burden of proof, constituting elements of civil liability, the damage compensation, the reasonable limits to the civil liability to the third party.The standard of duty is presumed to be negligent, and the burden of proof is accordingly shifted to the defendant, based on the presumption of fiduciary between auditors and the third party, to lighten the quote obligation of the third party, because the third party is faced with the difficulty of quoting. The CPA must prove the existence of excusing duty if he wants to gain the case.In the same time, we must make clear the range of the third party. The CPA are not able to undertake the responsibilities for all the third parties. We must make clear the chief reasons that caused the loss of the third party. There are two kind of possibilities that may cause that loss. One is called the "Market risks", the other is called "audit failure". Only under the condition of "audit failure", we can charge the civil liability against CPA. On the subject of the order of the liability, firstly, the liability of capital contributors should be strengthened. Then, on the basis of clearing the liability of those parties, such as those banks providing the basic information, the guarantors, related to the loss of the third parties. At last, the CPA should undertake the responsibilities in proportion in order to balance the interest between the CPA and the third parties.