Research On CPA’s Failure Of Diligence And Civil Liability

The new "Securities Law" that came into effect on March 1,2020 has increased the penalties for intermediaries that fail to perform their duties diligently.To become a registration system,it is even more necessary for a certified public accountant to take good care of it.Audit supervision is an indispensable link in the whole process of social and economic development,and its role is becoming more and more prominent.CPA auditing is an important cornerstone of maintaining social economy.With the cancellation of the pre-procedure procedure and the implementation of the representative litigation system,the case of being sued and liable for civil compensation for failing to perform due diligence is likely to face the situation of "indiscriminate litigation" because the certified public accountant fails to meet the requirements of the investor or the audited entity.Therefore,it is particularly important to sort out and analyze the status quo of civil liability involved in CPA,and to clarify the boundaries of diligence and due diligence,so as to improve audit quality,reduce the risk of civil liability caused by failure to perform due diligence,and enable the CPA industry to develop healthily.The research idea of this paper is to understand the future development trend of the CPA’s civil liability based on the current policy guidelines.The CPA’s diligence and conscientiousness judgment affects the judgment of civil liability,and the current boundary of the CPA’s diligence and responsibility is unclear.The subject is CPA’s failure to do their due diligence and civil liability.Then,I combed the relevant literature about the failure of due diligence and civil liability of certified public accountants,and found that there are few domestic scholars who have explored the boundary of due diligence and due diligence on the connection between failure of due diligence and civil liability.Based on the understanding of the relevant laws and regulations on the definition of diligence and due diligence and the main causes and types of civil liability for certified public accountants,this paper interprets the audit expectation gap theory,deep pocket theory,permissible danger and illegal obstruction theory that need to be considered in the subject of this article.Base.By grasping the overall knowledge framework involved in the topics written in this article,we statistically analyze the administrative punishment decisions of the China Securities Regulatory Commission on CPAs from 2001 to 2021,and analyze the current situation,types of matters and It also analyzes the current situation of the CPA’s civil liability and the disputes over the CPA’s civil liability between the parties involved in the lawsuit.After having a basic understanding of the current cases,the two cases of Lixin Audit Jinya Technology and Tianjian Audit Erkang Pharmaceutical were selected for analysis.After the two listed companies Jinya Technology and Erkang Pharmaceutical were exposed to financial fraud,Jinya Technology The annual report auditing unit of the fraudulent year,Lixin Certified Public Accountants,was subject to administrative punishment by the China Securities Regulatory Commission,and the annual report auditing unit of Erkang Pharmaceuticals in the fraudulent year,Tianjian Certified Public Accountants,was criticized by the Shenzhen Stock Exchange.According to the announcements issued by the regulatory authorities,the certified public accountants in these two cases were not diligent in their practice.However,in the judgment of civil liability,Lixin needs to bear joint and several liability for compensation,while Tianjian does not need to bear liability for compensation.Compare and analyze the performance of the two cases without due diligence,the legal documents applicable to the case,the responsibility distribution system,the pre-procedures,the professional judgment,the audit evidence chain,etc.,in order to clarify the boundaries of the diligence and due diligence of the certified public accountants,and discover the certified public accountants.There are imperfections in the laws and regulations related to civil liability.While this requires the joint efforts of many parties,this article proposes recommendations from the perspectives of legislators,administrative regulators,and certified public accountants.Based on the above analysis,relevant research conclusions were drawn.First,the boundaries of the CPA’s diligence and diligence are blurred,and it is recommended that its judgment criteria be to measure the CPA’s competence,cost-effectiveness principle and information asymmetry and other factors,comply with the auditing standards,consider the maximum extent that can be done,and balance with the diligence and due diligence required by the administrative supervision department;second,the CPA’s civil liability related laws and regulations on the "intentional" and "negligent" responsibility screening,The judgment of the size of the CPA’s liability and the civil liability that needs to be borne in different circumstances need to be further improved,which needs to be further improved,which helps the judge to determine the liability of the CPA in misrepresentation cases.