A Research About The Relationship Between Auditor's Legal Liability And Audit Quality

Market economy is under the rule of law which is an important mechanism keeping the market economy developing normally and orderly. Auditor who keeps the market order as an"economy police"is regulated by the law. Well than, how we can improve the audit quality by means of arranging the legal liability of auditor has become an issue, which is of great importance to perfect market economy's legal system in China.This paper is mainly about"the relationship between the auditor liability system and audit quality". First, we study the inside relationship between the auditor liability system and audit quality in nomology. Whether an auditor is reliable or not is mainly based on the premise of law. The function of auditor's legal liability include the solving conflict, communicating, punishing, complementing and urging an auditor to improve audit liability. The ultimate goal of arranging auditors'legal liability is to urge auditors to improve their audit quality, which is the basic judgement of whether an auditor should undertake the legal liability. There are five basic rules for implementing the legal liability in nomology, namely, the rule of making sure the liability by law, the rule of equal liability, the rule of being responsible for violating the statutory audit liability, the rule of being responsible to a certain extent and the rule of education. Second, we choose those companies whose stocks came into the market of Shenzhen and Shanghai in 2002 and in 2003 when the"9.1 rules"was made as the research objects to prove the influence, which is brought by increasing the auditor's legal liability, on the quality of audit. The result shows that increasing the auditor's legal liability did not improve the audit quality or the audit independence, and did not make auditors more aware of the law risk they would take. Many problems lie in the system of audit legal liability, especially in the civil legal system, which made the legal systems can not work fully. At last, on the basis of rules coming out of the analysis of the theories and in terms of the factual proof, this paper puts forward the advice on how to optimize the auditor's legal liability and improve the quality of audit, considering the defects lying in the administrative liability, criminal liability, especially in the civil liability.