The Rearch Upon The Legal Liabilites Of CPAs From The Auditors' Viewpoint

In the past decades, Schools of studies from the scholarship to practice have been paying constant attention to the legal liabilities of CPAs, which underlie the position and professional role of auditors. Most of the researches were focused on the on the legal liabilities of CPAs, from the viewpoint of lawyers. This paper probes this theme from an auditor's viewpoint.Firstly, economic theories were used to explain why the audit service appeared, the methods used are ranged from the scholarship of economic responsibility, of agency, of information science, of assurance science to confliction theory. Based on these, the paper forward analyzes the establishment of auditor's legal position, and the function or usefulness of audit service. Secondly, it analyzes the function of CPAs' legal liabilities, proposes that the Audit Standards be the main measures to determine the auditors' litigation facts. Thirdly, the paper analyzes the current situations of the legal liabilities of CPAs in China, from the aspect of the establishment of civil laws, the development and improvising of administrative rules and the introduction of criminal laws, of which commentary was represented about the effect upon the CPAs. Fourthly measures of PEST Technique were used to explain the causes and factors of the legal liabilities on CPAs in China, from the aspect from corporate governance, audit service industry, expectation gap to the traditional audit procedures. Lastly, the paper probes the reasons which cause the CPAs to conflict with legal liabilities, followed with some solutions and suggestions.