Study Of Current Legal Status Of Independent Auditing Standards

Certified Public Accountants are functioning as the most important gate-keepers in the process of assuring the quality of information disclosure in the current securities market, in which the information disclosure system has been severely distorted by the flood of misrepresentation. We may as well say that the health growth of the industry of Certified Public Accountants is very important to assure the order of securities market. However, a series cases about Certified Public Accountants have occurred frequently in recent years. On one hand, Certified Public Accountants are required to assure their legal liability; On the other hand, they claimed that they only have the reasonable legal liability. After analyzing their opinions, the writer found that the most important reason of causing this problem is that there is a disagreement in the legal status of the procedure of the Certified Public Accountants.This paper started from the fact analysis, through studying the Audit's duty of care, fully considered experiences of all concerned parties, and focused on the reasons why the current Accounting Principles can not be the reason of plead of civil procedure. The author objectively puts forward his own opinions about this question.The first part is introduction. It mainly discussed the current situation of the existence of misrepresentation in the civil liability of Certified Public Accountants in the cases of civil procedure. And then, it drew a concision that the main disagreement between the bar and the accountant lies in the legal status of procedure of independent Accounting Principles through analysis of their opinions on a series of procedure cases.The second part introduced the views and the evidences in the field of study on the role of current independent Accounting Principles. The bar think that the current Independent Accounting Principles has not that function, While Accountants have different ideas, who think it is the authority code in the practicing of Certified Public Accountants, and measure the quality of the Certified Public Accounting profession. Of course, some lawyers ensure the role of plead of Auditing; While some Accountants don't agree with them. For the sake of convenience, the author considered the opinion of the bar as the positive, and accountants as the negative.The third part focused on a duty of care in the process of auditing . It may Causetwo kinds of liability including contract and tort. But whatever it is, both sides Consider that the civil liability of CPA is a kind of fault breached by the CPA . In lawyer's eyes, the professional responsibility of CPA is due care, which mainly focused on the Prudent Man, Professional opinions and the father of kindness. However, the accountants think that the care of duty is mainly reflected on its professional prudence. CPA is required to have the sense of responsibility of seriousness and the attitude of prudence in the practicing of auditing; at the same time, it discussed the content of professional prudence.The fourth part mainly focused on the relationship of duty of care between Independent Accounting Principles and the CPA in practice of auditing. First, it discussed duty of care regulated by the current Independent Accounting Principles is lower than that of CAP. It is classified into four aspects to further discuss their relationship. From the relationship of discrepancy between Independent Accounting principles and the Audit expectations, some aspects of current Accounting Principles live up to the reasonable expectation of public. Obviously, a duty of care regulated by independent Accounting Principles is lower than that of CPA.The fifth part mainly introduced the reason that the current Independent Accounting Principles can't be used as the procedural plead. From some cases of foreign countries, they will use different ways in solving the problem of plead role of Independent Accounting Principles according to the change of time, place and situation. When it conforms to the standard of the public, some will recognize its plead role; while it doesn't some will object to its plead role. Moreover, If it is used as the reason of procedural plead, it will bring some negative effects.The last part is summary. It emphasize on the writer's opinions and meanwhile it criticized some actions of the bar. It holds the hope of the growth of current Independent Accounting Principles. The bar and the accountants should often communicate with each other and try to make it meet the standard of the public, and serve the public as much as it can.