The Research Upon The Civil Liability Of Certified Public Accountant To The Third Party In Independent Audit From The Professional Liability Viewpoint

Legal liability of Certified Public Accountants (CPAs) in independent audit is an ancient topic. In west countries, the cases about accusing CPAs increased rapidly from the middle of 1960s, it is said that the CPAs profession entered the era of"Litigation Explosion". Chinese CPAs had not met litigation explosion like their American companies for lack of efficient rules before the middle of 1990s, but the fact that they were involved in litigation happens more and more. especially after the"Yin Guang Xia case"in 2001. The perfection of legal system makes CPAs face the strict environment of increasing civil legal risk, as the result, theoretical research on CPAs' auditing civil legal liability becomes very pertinent.Due to the"Expectation Gap"exists in the area of audit's function between professional lawyers, public and professional accountants, a hot issue between professional lawyers and professional accountants became that how the CPAs should assume the damage of the accounting information users. The author finds that"professional liability"may be a valid path to encourage professional accountants to participate in the process to perfection of CPAs'civil legal system and improve the scientificity and applicability of civil liability system of CPAs. Under the framework of professional liability, this thesis advances the study on the civil liability of CPAs to the third party in independent audit. The whole thesis is divided into five chapters as follows:The first chapter is a brief introduction of the research value, the importance of perfection of CPAs'civil legal liability and development of which gives the author an inspiration that using"professional liability"as a reasonable and valid path of getting professional accountants involved in the process to(developed into the ) perfection of CPAs'civil legal system.The second chapter is about the conception of"Theoretical Framework of CPAs'Professional Liability to the Third Party". Firstly, taking the compensation for damages as the legislative orientation of civil compensation system in terms of securities, it is more in agreement with the legal interest of China's legislation in this respect. Secondly, it's necessary to establish the main-body status of professional accountants in the process to the perfection of CPAs'civil legal system. Based on the above steps, the author builds up the"Theoretical Framework of CPAs'Professional Liability to the Third Party", this framework chart contains all the professional characteristics of CPAs and guilds all analyses below.The following two chapters mainly explain the affirmation of the CPAs professional liability,The third chapter discusses the rationalization of substantive law. Based on the analysis of relations between"audit responsibility"and"CPA's auditing civil legal liability", it demonstrates that the doctrine of CPA's professional liability fixation is doctrine of presumptive wrongs. If the CPAs who provide the false financial statements with negligence but not intentionally, do damage to the third party, they should bear the professional liability. To some extent, there is correspondence between professional characteristics and elements of the professional liability of CPAs to the third party. It has four elements in the author's framework: damages; misfeasance; negligence and causal link between the defendant's negligence and the damages; and the thesis mainly focuses on negligence and causation.The forth chapter gives some suggestion of procedural perfection in the lawsuit. Firstly, forensic accounting could be the organic combination of"judicial appraisal"and"expert witness", and give full support to the lawsuit. Then, disputes concerning"small amount of claim but large amount of victims", and stock owner's damaged interests are often very difficult to be relieved, it is necessary to draw on the foreign rational factors of community lawsuit system, and combine our judicature practice and go further in the reform and make our delegate litigation better functionally. Thirdly, the general limitation is not appropriate to the complex and changeable security transactions. On the basis of study on the regulation of the foreign countries whose security markets are flourishing, this thesis expounds that the limitation of action should be different from that of General Principle of Civil Law.Finally, concerning the burden of damage compensation, there are three risks dispersed mechanism. By sharing between the victim and the perpetrator, sharing among perpetrators in joint tort, the cost was born by the perpetrator and the society. For CPAs'professional liability, the last one is the most important, so that it's necessary to accelerate the development of CPAs'professional liability insurance.Taking the whole thesis into consideration, there are three major contributions:1. Emphasize the establishment of the main-body status of professional accountants in the perfection of CPAs'civil legal system.2. Choose"professional liability"as a valid path to emphasize the influence of the professional characteristics of CPAs on their civil legal liability.3. Establish the"Theoretical Framework of CPAs'Professional Liability to the Third Party"and analyze all the constitute elements of CPAs'civil legal liability under the framework.The limitations of this thesis include restriction of the scope of topics and restriction of its content, break through these limitations such as"in independent audit","to the third party", and"with lawsuit mechanism"may be helpful to get further development of the perfection of CPAs'civil legal system.