On The Tort Liability Of CPA Toward To The Third Parties In Assurance Service

The Certified Public Accountants issued false reports damage the interests of third parties in judicial practice is a very common problem. Since the case of Sichuan DeYang accounting firm misrepresentation in 1996, the CPA's civil liability attracted more and more attention from accounting scholars and legal scholars. Although the Supreme People's Court unveiled 8 judicial interpretations about false verification, false auditing, securities misrepresentation, however, in terms of the scope of accounting practice, these judicial interpretations failed to cover other assurance service involved in false reports cause damages to the third parties, thus how to deal with the similar cases in judicial practice become a problem. This paper give a research on the issue of CPA's civil liability towards third parties cause by false attestation report from the whole assurance services aspect, in order to contribute to the judicial practice in the handling of related cases. In addition, as a typical professional liability, the author wishes to understand the whole problem of professional by the research of CPA's professional liability.This paper is composed of the following five parts:The first part introduced the follow concepts related to Auditing: "assurance service", " The relationship between the three parties in assurance service" ,"the third party " , and emphatically pointed out: in the discussion of CPA's civil liability toward third parties, two aspects should be considered when understanding the concept of "third parties": firstly, the third parties are the parties outside the assurance service contractual relationship; secondly, the third parties are the potential users of assurance reports but not the responsible parties .The second part introduced the theory evolution and judicial changes about the CPA's civil liability toward the third parties. In this section, through the literature investigate, the author concluded that: (1) In theory, accounting academics pay more attention to the issue of CPA's liability toward third parties than jurisprudence; the aspects of the CPA's civil liability studies are diversity, but the tort law aspect gradually became the mainstream. (2) In judicial practice, although judicial policy changes frequently, but the nature of tort liability became clearer and clearer both in trial practice and in the judicial interpretation, and eventually be fully established. Based on this conclusion, the author decided to choose the aspect of tort law for further discussion.The third part focused on the doctrine of liability in CPA's tort liability during assurance service. Based on the principles of the doctrine of tort liability and the analysis of the theories related to CPA's tort liability toward to the third parties, the author maintain the special form of doctrine of liability for wrongs----doctrine of presumptive wrongs should be adopted in the case of CPA's tort liability toward to the third parties.The fourth part focused on the elements of CPA's tort liability toward to the third parties. This section based on the traditional"four elements"of tort liability. The elements of CPA's tort CPA's tort liabilities toward to the third parties are follows: firstly, the CPA issued false assurance reports; secondly, the third parties'damage; thirdly, there are cause and effect relationships between the false assurance reports and the damage.The fifth Part focused on the subjects assuming CPA's tort liability toward to the third parties. For this issue, scholars have "monism" and "dualism" of the dispute, the relevant provisions of law and judicial interpretation also exists between "monism" and "dualism" of the conflict. The author in favor of the "dualism", and that the accounting firms and CPA's civil liability depends on the organized form of the accounting firms. China's general partner and the special general partner of accounting firm adopted a system of "dualism" consistent with the actual situation of our country at present, this should be affirmed. For the limited liability accounting firms, relevant laws and regulations should be revised, in order to Hold the Professional liability of CPA directly.