Research On Civil Liability Of CPAs' Audit

Financial audit is one of the important parts of socio-economic monitoring system. To some extent, CPA has become the first line of supervision of listed companies. Certified public accountants provide audit report and financial report for the market participants in important decision-making information. If done wrong or fraudulent, the CPA's behavior is likely to result in losses to the clients or third party who rely on the audited financial statements, and even lead to serious disorder in the economic order. In this regard, a sound CPA auditing rules and civil liability system should exist. In recent years, civil infringement cases related to CPA increase gradually. How to improve the civil liability system has become a hot topic of social concern. It is particularly important to reasonably determine the allocation of civil liability of CPA. Civil responsibility of CPA is one of the expert civil liabilities. It is necessary to pay attention to strengthen the CPA's responsibility and to ensure the quality of their professional ethics and practice, as well as to avoid excessive CPA responsibility, in case to curb the development of the industry. This paper will study the CPA audit services, based on the "other interested parties" civil liability out of the certified public accountants audit clients, and analyze the certified public accountants audit tort liability of third party civil liability and the composition of the elements of tort liability, in order to discuss the content and standards of audit services of Certified Public Accountants Elements of tort liability, as well as researching the issue raised in the CPA system, a number of pending civil liability issues and the author's recommendations.I consider that civil liability of certified public accountant audit should involve the scope of tort liability. There are for elements of the tort liability:the CPA issued a false audit report; the audit of certified public accountants had faults; interested persons suffer a loss; there is causal relationship between the loss and the CPA issued false reports. In determining whether to establish the existence of false reporting and fault, the CPA practice guidelines should be the main but not the only criteria. Criteria should also include other relevant laws and regulations and the integrity of fair principles. "False audit report" means a certified public accountants'audit reports, which involve "significant" and "false statements". From the procedures and results aspects, it is not entirely reasonable that expert CPA perform the necessary audit procedures, resulting in audit report including the existence of false statements. False statements and the report should not only make a significant impact on users, but also misstate the amount involved or the nature of Certified Public Accountants who have to practice in accordance with ethical guidelines and practice identified the importance of a reasonable level. In determining the liability of type, in addition to considering the psychological state of Certified Public Accountants, it should also be a combination of different types of audit services. With the plaintiff qualified "interested third party" that the victims of false audit report, should include not only those securities investment and trading, but also creditors, which can be divided into general creditors such as banks, securities mortgagee, the supply and other types of business. False report, the CPA's fault, the existence of proof of causation should be the plaintiff and the information for different users to choose the applicable burden of proof principle; on the different amount of damage the victim should be calculated in different ways.