Research On The Legal Issues Of Civil Liability For False Statements By Accounting Firm

In recent years,China’s securities market has developed vigorously,and securities investment has become the choice of household asset allocation for more and more ordinary people.However,because the majority of investors do not have a deep understanding of the relevant knowledge of the securities field,and the issuer is in an information advantage,the securities fraud in the market has been repeated,and the false statement behavior is the representative.The cases of false statement in the securities market began to appear from around 2002,and the number of related civil dispute cases showed an increasing trend year by year,and began to accelerate from2016,and reached the peak in recent years.When dealing with relevant cases,the court determines the civil legal liability of intermediary service institutions,especially accounting firms,mainly according to the new Securities Law,Judicial Interpretation of False Statements and Judicial Interpretation of Audit Services.However,in addition to the securities Law was updated last year,the latter two acts were enacted in 2003 and 2007,and there are some deviations in the application of some provisions and the existing Securities Law,which often become the reason for the defendant to plead.Starting from the trial result of Lixin Accounting Firm’s civil liability in the false statement case of "Jinya Technology" in 2019,this paper analyzes the fault determination standard,the form of external liability assumption and the way of internal liability assumption of accounting firms,and puts forward suggestions for improvement according to the status quo of regulations.Generally,the principle of presumption of fault is applied to the identification of accounting firms’ faults,so as to better protect the rights and interests of small and medium investors.However,the definition of subjective negligence and intention and the distinction between accounting responsibility and audit responsibility have always been controversial issues.In the form of external liability,if the accounting firm intentionally carries out the false statement,it should be held jointly and severally liable according to the requirements of tort law.However,if the accounting firm issues false audit reports due to negligence,it should be investigated for joint and several liability within the scope of fault.In terms of the internal liability bearing mode,the certified public accountants in China usually do not have to bear civil legal liability because of the special general partnership system,and the compensation liability of the accounting firm lacks the corresponding institutional guarantee.In view of the above problems,the court should deal well with the expectation gap between accounting and legal circles when dealing with the dispute cases of false statement in the securities market,and supplement the determination of "presumption of intent" to make the determination of liability more accurate.At the same time,although the external liability should be strengthened mainly by joint and several liability,the point that accounting firms should bear partial liability in the case of negligence should be further clarified in the legislation.Finally,it is suggested that CPA should be included in the scope of civil liability,and improve the civil compensation protection system.Through the understanding of auditing industry theory and practice standard,we can analyze the role and responsibility of accounting firms in related false statement cases in a more in-depth and targeted way,which is conducive to improve the practice level and moral quality of accounting firms in China,and further improve the quality of information in the securities market.