Research On Civil Liability Of CPAs In Securities Market

The transparent and genuine financial information is the basic requirement for the securities market to take effect, and also the vital reference for the investors to make decision. Auditing process by Certified Public Accountants(CPAs) guarantees the genuineness of the financial information. Thus CPAs are horned as the Economic Policemen. However, the practice both home and abroad demonstrates that CPAs shall be responsible for the fraud scandals in securities market. Up to May 2006, about ten thousands investors filed suits for damages in securities market in China. In accordance with the public disclosure, there were 19 listed companies who was brought lawsuit against. The total claims amount to 800,000,000 to 900,000,000 RMB. April 2007, Guangzhou Intermediate Court resumed the suit about Kelong and Deloitte. CPAs have become the target for the investors to make theirs claims. The trust in CPAs, GAAS and GAAP has aroused the public concern.What role do CPAs play in securities market? How to define CPAs'legal liability in securities misrepresentation lawsuits? How do the CPAs assume the liability? All these issues have become the concern of the practical and theoretical fields. Research on these issues is of great significance, and will contribute to the order of the securities market, the protection of the investors and the credibility of the CPAs. The civil liability of the CPAs is a system that distributes the loss among the listed companies, CPAs and the investors. This is a legal issue as well as a public policy consideration to achieve the balance between public and CPAs, the balance between justice and efficiency. There are four parts in the thesis. The first part gives introduction to the CPAs and their duty in securities market. The second part discusses the nature, benefit conflict and value conflict of the civil liability of the CPAs in securities market. The third part deals with the standard of duty, constituting elements of civil liability, defenses of liability so as to give full description about the scope of CPA's liability. The fourth part discusses the assumption of the CPA's civil liability with regards to the forms of CPAs'liability and the organization of the accounting firm, the security institution of CPAs civil liability.This thesis makes clear the civil liability of CPAs by historical, and comparative methods, reviews China's civil liability system of CPAs in securities market, and gives legislative advice, in the hopes that it will benefit the improvement of the civil liability institution in our country.