CPA's Civil Liability Towards Third Parties

There are many differences between CPA's (Certified Public Accountant) civil liability towards third parties and traditional tort liability and there are many shortages to this problem in both legislation and judicial practice in our country. Starting with CPA's professional orientation in capital market, this thesis concludes and coordinates the productions to this problem both in and out of China, and also analyses these productions' merits and shortages. Taking reference to experience of legislation and judicial practice both in common law and civil law, combining the actuality of our country, this thesis analyses CPA's civil liability towards third parties from a juristic angle and discusses the particularity of CPA's civil liability towards third parties in detail. The problem of CPA's civil liability towards third parties involves interests of many parties. So, it is not practical only to find a way of fairly bearing of damage between CPAs. It is necessary to take CPA's civil liability under the management system of corporation and share the risk of capital market between every participant fairly and reasonably.The first chapter of this thesis summarizes the difficulties of CPA's civil liability towards third parties in the first place: 1, what is the range of third parties the CPA should take responsibility for because of false audit report? 2, which principle of liability should be applied when bearing CPA's civil liability, the principle of liability for fault or the principle of liability without fault? What is the standard of fault? 3, how to confirm the causality between the fault of CPA and the damage of report user? 4, what kind of CPA's liability is if the audit is failing, joint liability or proportional liability? Then, this chapter coordinates the relative legal regulations and study actuality of our country and analyses their shortages.The second chapter of this thesis contains three sections. The first section reviews the history background of CPA profession and probes CPA's professional orientation in capital market and then draws a conclusion that CPA should be loyal and responsible to the public. The second section analyses firstly the backgrounds, meanings and academic bases of contractual individual standard, the third party known standard and the third party foreseeable standard. Then the section discusses the policy factors of very standard. Last of all, the section discusses the reasonable range of third parties combining with the legal regulations of our country. The third section limits the CPA's civil liability towards third parties, discussing emphatically the nature of CPA's civil liability towards third parties.The third chapter of this thesis discusses the principle of liability to CPA's civil liability towards third parties. Two main problems are included: the choice of principle of liability to CPA's civil liability and the standard of liability of fault. Aiming at the conflict between the circle of legal profession and the circle of accountant profession, this chapter discusses the legal status of independent auditing rule in the end.The forth chapter of this thesis discusses the confirmation and bearing of damage compensation under professional negligence. Different from traditional tort, CPA's professional negligence is tort of information. It is special in the confirmation of both damage and causality. What's more, it involves the investors' interests. So, policy factors are mainly taken into consideration when the judicial department confirming the CPA's liability.What comes last is the summarization of the thesis. In this part, the thesis suggests that the purpose of system reformation is to find an equation acceptable to both sides between public interests and CPAs' interests.