On The Independent Audit Of CPA To The Third Party Civil Liability

The civil liability of Independent Audit by Certified PublicAccountant(CPA) to third parties is a hot and difficult problem both inaccantancy field and in law field in western countires.In ourcountries,some related questions are also disccussed in theory realm andPractical realm.But because of simplicity and Lag of Legislation, thewhole Responsibility system of Independent Audit by CPA to thirdparties is not established. The author thinks the whole Responsibilitysystem of Independent Audit by CPA to third parties should include therange of third parties, the nature of the civil liability, the standard of duty,the constitutive requirments and the duty of indemnity, combine thetheory with practice of CPAs' liability to third parties in westerncountires and our countries, the author prepares to makes a discussion tothe above questions.The full text consists of six parts, the main point areas follows:In the first part,The author starts from making a brief overview ofIndependent Audit and it's civil liability. The origins and developmentsof Independent Audit by CPA are introduced at first.Then, the authorpoints out thatThe range of third parties are discussed in the second part.The authorrecommend the Privity of contract,Primary beneficiary theory,Known thirdparties and Forseen persons etc.that applied in the common law country.Then thestandard that confirm the range of third parties in china are Proposed by the author.The nature of the civil liability of Independent Audit by CPA to third partiesare demonstrated in the third party. Through the analysis to related theories, theauthor makes the conclusion that the nature of CPAs' to third parties should beregarded as tort to not only protect the benefits of third parties for the better but alsoregulate CPAs' action,maintain the order of the market.The standard of duty are disoassed in the forth part.The author attributes thestandard of duty to the fault theory on the emphasis of analyzing CPAs' liability tothird parties.Besides,the authoe palticularly stresses to apply the special method——the fault predict because of professional characters of CPAs'.Applyingthe method of CPA fault predict absolute duty of proof that third parties offering,onone hand,it's benificial to the third party, on the other hand, admit CPA to offer thecontradictory proof so as to dismiss his liability if he has no faults.This principle isavailable for both parties to unhold their legal rights.The constitutive requirments of CPAs' tort to third parties are discussde in thefifth part.The author thinks thatthe CPAs' liability to third parties' constitutiverequirments include issusing false reports,subject faults,harmful consequences andcausalities.Meanwhile every elements are analysed deeply.Defence causes are alsodissected at last.The duty of indemnity, scope,caculation of indemnity and the dutyundertaking are brought up in the final part.The author deems should be theaccounting firm, and the accounting firm has the rights to requir CPA'scompensation when CPA issues false reports at intension or with serious faults.