The Relationship Between CPA Auditing System And The CPA's Responsibility

As the problem of Delong becomes more and more clearly,Delot,the auditor of Delong catchs the public's eyes.Delot said, it has followed china's rules ,there is no evidence that it fraued the public.However, the public shill showed their doubts.It is a great scandal that Delot, one of the four most famous CPA firms,has done things like that. The public can not help to suspect that, are the CPA firms believable, have they tried their bet, should they afford the publication of law, what kinds of publication shall we imply?This paper, based on the conception of institution of Masakiko Aoki, according to the institution factors analysis method which can be applied to demonstrate the factors of CPA auditing system further, and come to a conclusion that the common belief of CPA auditing system is to prevent and eliminate the fraud of security and the legal duty is the restriction of CPA auditing system. Without the consummating of the rule of law, CPA would not take responsibility for it. Besides, whether CPA has been cautious during their work is a most important ration to charge whether they should be punished. Although we can not charge with it totally, CPA can not afford to take unlimited liability. To make the CPA institution be more perfect, we should not only consummate the rule of law but also create the sociality that a man with great credit and moral can be more well-thought-of.This paper is composed of six sections:Section 1: Literature Review and CommentsThis section has reviewed the literature about the responsibility of CPA both from the foreign and national literature, and comes to a conclusion that we can solve the problem better from the point of CPA institution;Section 2: The property of CPA auditing system and the legal duty of CPAThere is an interactive relation between CPA liability and CPA institution. In this part, first we discussed the property of CPA institution and point out that it is the price mechanism to make up for failure of economic supervision system, it has the property of is quasi-government and it is the balance of game. Shared values, one of the factors of CPA institution determines the legal responsibility of CPA targets. Game rules factors and constraints factors are another two that identified CPA legal responsibility for the floor and ceiling. Adapt to CPA institution, we should established CPA liability with Civil Liability, Criminal liability and Administrative liability;Section 3: The boarder of the legal duty of CPATo make clear of the boarder of CPA liability, first, we should first dived accounting liability from auditing liability otherwise CPA would bear unnecessary costs. Then we made a review of the history of the liability of American CPA and focus on the problem in the framework of tort liability. At last, we discussed the constitute elements of CPA liability and the liability Principle.Section 4: The legal duty of CPA and institution economyIn this part first we discusses a reasonable assurance of CPA liability to CPA institution. If the level of the liability is too low, it can not constrain the behavior of CPA; if too high, it would be not only a waste of social resources but also harmful to the development of CPA. It is also important to consider other restrictive mechanisms to study the liability of CPA. At the last of this part we discussed the role of moral to CPA liability adapt from the model of Tokugawa.Section 5: The problem and the way to solveIn this section, we make a simple review of the development stage in China, and come to a conclusion that although have made a great improvement, we should consume the legal of duty of CPA, at the same time; the punishment must be not too severe.The last section is the conclusion of this paper. CPA should take the responsibility to discover and report the financial fraud of the corporations; it is not only because of CPA institution but also the shared values of all the participants. So it is important to continually improve and perfect the related laws and regulations according to the level of socioeconomic development. At the same time, we should attach importance to social reputation and social moral to facilitate CPA institution to play a greater role.