On The Civil Liability Of Accounting Firms For Third Parties

The accounting firm,known as the “Economic Police”,plays an indispensable role in economic market activities.In recent years,financial fraud cases,like the Yinguangxia case,the Great Wisdom case,the Wanfusheng case and the Greenland case,have caused serious doubts about the fairness of the audit quality of the accounting firm,which have a huge impact on the whole industry and the third party suffers great economic losses.And only in the Yinguangsha case had the investors lost more than 10 billion yuan.The civil liabilities of the accounting firms,which have been frequently prosecuted,for the third party have been focused by the accounting and law circles.Three chapters have been divided into in this thesis.The first chapter is an overview of the accounting firms' civil liability for third parties.Firstly,similar concepts are analyzed and the theoretical basis that trust obligation is what that the civil liability is the counting firm for the third party.Secondly,by discussing the contract liability theory and the tort liability theory,combined with the trial practice in China,the civil liability is recognized as the tort liability.Finally,by discussing different imputation principles,it is proposed that the presumption of fault principle is the inevitable choice of legislation and judicial practice in China.The problems of the accounting firm's civil liability to the third party and reasons for the lack of responsibility of the accounting firms have been analyzed in the second chapter.Based on the summary and analysis of relevant cases,three main existing problems are proposed.The first one is that the confusion of laws and regulations leads to the difficulty of defining the scope of third parties.The second one is the way in which accounting firms take responsibility when negligence appears is not clear.The third one is that the third party does not get adequate relief for the lacking of setting of leading procedures and liability insurance.Ideas and methods are tried to be given in the third chapter according to the related problems raised in the second chapter.It is proposed that the best way to solve those problems fundamentally is to attach importance to the formulation and improvement of the legal system of civil liability.Combined with the foreign classification of the third party,it is proposed that the determination of the scope of the third party in China needs to be linked to the type of audit business of the accounting firm in China,of which the reasonable trust is the standard.When negligence happens in the accounting firms,it shall avoid falling into the deep pocket trap while taking supplementary compensation and protect the legitimate rights for the third party.The provisions of whether set leading procedures or not should be unified to ensure the successful access to the litigation procedures of the third party.Insurance of the accounting firm should be enforced and the management and regulation of the venture fund should be the strengthened to ensure realization of the basic purpose of the prosecution of the third party to the accounting firms.