Legal Liability Of Certified Public Accountants Concerning Information Disclosure In Securities Market

Certified Public Accountants are functioning as the most important gate-keepers in the process of assuring the quality of information disclosure in the current securities market, in which the information disclosure system has been severely distorted by the flood of misrepresentation. Shocked by a series cases about misstatement, especially the Enron case and the case of "Ymguangxia", most countries around the world began to question the credibility of the Certified Public Accountants. What are the reasons of the frequent occurrence of failure of audit? How can the industry of Certified Public Accountants survive from the crisis of public trust? How can the solemnity of security information disclose system be guaranteed? And how can the order of the securities market be maintained?Facing with these problems, I conducted this thorough study of the phenomenon of misrepresentation in securities market, and found that one important reason of this phenomenon is that the legal liability of Certified Public Accountants is not clear, especially that the civil liability is in default and the liability cost for false audit report is too low. It is important to re-construct the credibility of the industry of Certified Public Accountants, for both maintaining the order of securities market and protecting the interest of investors.This paper started from the fact analysis, through summarizing relevant preferences, fully considered experiences of all concerned parties, and focused on the specific issue of the legal liability of Certified Public Accountants. This paper consisted of eight chapters, and totally about 160,000 Chinese characters.The first chapter introduced the current situation of the existence of misrepresentations in the securities market. It summarized the general contents and means of the misrepresentation through analysis of the important misrepresentation cases occurred in recent years, and analyzed the role which Certified Public Accountants played in these misrepresentation through the analysis of the legal features of Certified Public Accountants. Chapter 1 summarized the main reasons of the participation of Certified Public Accountants into misrepresentation as follows: the audit business is at the stage of buyer-market; the independence of Certified Public Accountants is materially inadequate; the total legal environment is not sound; and the liability cost of Certified Public Accountants for illegal acts is too low, among which thelast one is considered to be a very important and key reason why the misrepresentation and false audit report of Certified Public Accountants have occurred so frequently. It is therefore an important mission of the security legislation of China to improve the study of legal liability of Certified Public Accountants and to impose the civil liability on Certified Public Accountants for concerned misrepresentations.Chapter 2 introduced the current development of foreign countries in the field of the study on legal liability of Certified Public Accountants, and the problems China is facing, and analyzed the importance of the study of this issue. The legal liability of Certified Public Accountants has always been an important issue in the securities markets all over the world. The achievement of those countries that have an advanced securities market is of great reference importance to us. With regard to the problems in China, the seriously unbalanced emphasis on administrative liability exists in both legislation and practice, whereas the civil liability which is regarded as the best protection of interest of investors, is virtually in default. The only few legal provisions concerning the civil liability is essentially useless due to lack of feasibility. For the above reasons, to conduct study on some basic issues concerning the civil liability of Certified Public Accountants, such as the nature of civil liability, review standard of false audit report, standard of duty of Certified Public Accountants, burden of proof, etc, is important legal means to effectively r...