The Impacts Of Auditing Standards Upon The Criterion Of CPAs' Civil Liability

After the Litigant Blast of the United States in the 70s of the 20th century, lawsuits related to Certified Public Accountants (CPA) emerge endlessly all around the world, which bothers the CPAs and becomes a hot and difficult issue. In 2006, the new China Auditing Standards of CPA (the new Auditing Standards) was promulgated and implemented, which induces a dispute of whether the new Auditing Standards is an angel or a devil in China for CPA professionals. Does the high standard and advancement of the new Auditing Standards increase the legal risks of CPAs while improving the quality of auditing?On June 15, 2007, Several Regulations on Hearing of Civil Tort Compensation Lawsuits related to Auditing Activities of CPA Firms was promulgated by The Supreme Court of P.R. China which defines the role of the new Auditing Standards in the criterion of CPAs' civil liability and increases the worry of China CPAs. The new Auditing Standards and its impacts upon the criterion of CPAs' civil liability make China CPAs both delighted and worried. Whether the new Auditing Standards is an angel protecting CPAs or a devil pushing CPAs into hell, is still waiting for the reply of lawsuits in practice and instruction of academic researches. This thesis discusses from the viewpoint of impacts of Auditing Standards upon the criterion of CPAs' civil liability and intends to provide some references for further studies of this topic.Chapter One summarizes firstly the auditing activities, analyzes the origin, the goals, functions and limitations of auditing activities, makes preparations for stating the occurrence and functions of Auditing Standards of CPA and introduces the system and application of Auditing Standards and discusses its legal status. Chapter Two briefly narrates the types of legal liabilities of auditing, the attribution principle of civil tort liability, and judgment criteria of fault and reviews the changes of civil liabilities of auditing in lawsuits in practice. Chapter Three differentiates several pairs of concepts related to accounting and auditing and analyzes the impacting factors of Auditing Standards on the criterion of CPAs' civil liability above all, then observes the impacts of Auditing Standards on the criterion of CPAs' civil liability in lawsuits in practice, finally puts emphasis on opinions on how to improve the impacts of Auditing Standards on the criterion of CPAs' civil liability.