Auditor's Legal Liability In The Fraud Of Financial Reports

In recent years,cases of fraudulent financial reports of listed companies have frequently appeared in the CSRC's administrative punishment notice.When an illegal company is punished,auditors who publish inappropriate audit opinions on their false financial reports are often punished.The reason is that the fact that some listed companies fail to find and correct financial statements in a timely manner is often associated with auditors failing to perform due diligence when they perform audits.In accordance with the Securities Law,the Company Law and other laws and regulations and the Chinese CPA practicing principles and rules,the CSRC has identified the accounting firm's and its signing CPA's illegal liability and imposed administrative penalties.The main forms of punishment include: Confiscation of audit revenue,fines,and even the suspension of its securities service qualifications.Many large-scale accounting firms have therefore paid huge monetary and reputational costs,which has also triggered large-scale corporate dismissal of accounting firms and the suspension of IPO projects,which has caused many adverse effects on the securities market.In today's complex and volatile capital markets,auditors play an increasingly important role in auditing,and third-party investors are increasingly using the audit report's information and expectations.If the auditors fail to perform the audit,their liability should be properly and reasonably determined.but the current prevailing phenomenon is that it attaches importance to administrative liability and despises the civil liability that it may bear when the audit failed.In the long run,it will not only fail to truly meet the needs of the development of the securities market,but may bring about a series of social problems.In advancing the development of China's legalization,the practice of identifying the legal liability of auditors in the process of auditing should also be an important part in which improvement should be made.This article starts with the auditor's legal liability,especially the civil legal liability that have not yet attracted enough attention.First of all,through the combination of auditing theory and law related theoretical knowledge,trying to clarify China's current status of the determination of the three legal liability,and focuses on the relevant procedures for the auditor's civil liability determination,and then proposed some disadvantages of "paying too much attention on administrative liability but not civil liability".The second is to analyze the legal liability of the auditors in two cases that have occurred in recent years in China and analyze the legal liability of the auditors in order to sum up the possible regularities.Finally,this paper combines the results of relevant overseas excellent experience puts forward possible improvement directions for China's determination of strengthening the civil liability of the auditor,and proposes feasible solutions for revising and improving China's civil legal system,advancing China's audit laws and regulations,and standardizing the operation of China's capital market so that to romote the development of China's CPA industry and enhance international competitiveness to make a contribution.