Research On Joint Liablity Of Certified Public Accountant In Audit

With the release of the new Company Law in 2014, certified public accountants’ capital verification business has basically faded away due to occurrence of the subscription registration system. It seems that the theoretical disputes aiming at relevant legal liabilities of certified public accountants’issuance of fake capital verification reports can be stopped. After issuing fake audit reports during audit business, they cannot avoid the deserved joint liabilities any longer. Audit business is much more complicated than capital verification, involves more interested parties and brings more extensive influences. It can be predicted that the accounting profession in China may soon get involved into the headache of audit lawsuit after the big bang of capital verification lawsuit. Hence, it is currently urgent to set up and perfect systems related to joint liabilities of certified public accountants in audit.Merely from the perspective of legal systems, legal rules which investigate joint liabilities of certified public accountants shall have no essential differences from contract liability rules or tort liability rules. However, theoretically speaking, the accounting profession and the legal profession fail to reach a consensus about many aspects of systems related to joint liabilities of certified public accountants during audit. The fundamental reason lies in that damages brought by accountants’issuance of fake audit reports to other people are purely a kind of economic loss rather than personal injuries or property damages under a general tort law system. With appropriate application of financial accounting knowledge, the paper tries to research joint liability system of certified public accountants from the perspective of law science. The whole paper is divided into 3 parts. Part 1 demonstrates the legitimacy in certified public accountants’ bearing of joint liabilities in audit according to legal theories. At first, this part introduces disputes between accounting profession and legal profession about whether accountants can be taken as subjects to bear joint liabilities and analyzes rationality and defects of their respective opinions. Secondly, this part fully demonstrates the legitimacy of taking accountants as subjects to bear joint liabilities from perspectives such as accountants’ audit business and specialty of accounting profession. Part 2 analyzes important elements constituting joint liabilities of accountants item by item; deeply analyzes dispute focuses in the theoretical field about affirmation of faults and causality relationships; puts forward suggestions about perfection in combination with relevant regulations; tries to take different opinions in Anglo-American Legal System and Civil Law System as reference aiming at the problem of third party scope and determines the third party scope fairly in combination with actual judicial situations in our country in order to realize balance in interests of various subjects. Part 3 discusses the liability scope about bearing of joint compensation, takes domestic and foreign practices of legislation and justice as reference, makes research from both longitudinal and transverse perspectives, and tries to determine a fair and rational standard for compensation scope.