Case Study On The Civil Liability Of Certified Public Accountants In The Annual Report Audit Of Shanghai DZH Limited Company

With the improvement of the socialist market economy system,certified public accountants,as the "economic police",are playing an increasingly important role in supervising companies in the capital market.Its audit reports enhance the value and credibility of financial information and provide a reliable basis for the decision-making of investors in the securities market and other parties.In recent years,many cases of financial fraud of listed companies in China have aroused controversy from all walks of life.People not only pay attention to the main body of corporate fraud,the accountability of certified public accountants who issue false audit reports for them has also been pushed to the forefront.Since the civil liability emphasizes the compensation and recovery of the damaged economic interests,it is of great significance for the public to investigate the civil liability of certified public accountants.The civil liability borne by certified public accountants is abnormally light,which will reduce the cost of CPA fraud and lead to profit-seeking behavior in the process of auditing practice.However,because the audit can only provide reasonable assurance of the inherent restrictions,bearing the abnormal heavy civil liability,will make the whole industry practice risk rise sharply,and also have a significant impact on the stability of the capital market.Therefore,it is of great significance to reasonably define the civil liability of certified public accountants and improve the civil liability system of certified public accountants in China to safeguard the legitimate rights and interests of certified public accountants and investors as well as the vigorous development of the capital market.This paper takes the audit case of Shu Lun Pan's 2013 annual report on Shanghai DZH limited company as the research object.This is the first time that the court has decided that intermediary institutions bear unlimited joint and several liability for financial fraud of listed companies after the promulgation of "several provisions on civil tort compensation cases involving audit activities of accounting firms" in 2007.This has important research value in the absence of judicial practice of civil liability.On the basis of understanding the domestic and foreign scholars' views on the civil liability of certified public accountants,integrating the theory in the field of auditing and law,this paper studies the identification process of civil liability of Shu Lun Pan from the four components of civil liability by using the case analysis method.Through analysis,it is found that the civil liability system of certified public accountants has many problems in the aspects of certified public accountants,legalenvironment and market supervision.It focuses on the analysis of the civil liability in the process of the subjective fault of the demarcation standard is not clear,causal confirmation is too principled,the way and scope of responsibility is unreasonable.These problems seriously affect the reasonable civil liability of certified public accountants,and they can not play the role of balancing the interests of the public and the interests of certified public accountants.Therefore,drawing lessons from the experience of mature capital market and combining with the current situation of China,it is advocated to increase the individualized consideration of causality in the identification of responsibility.On the basis of subdivision of fault types,the mode of bearing mainly proportional liability and supplemented by joint liability is introduced.In case of gross negligence,Shu Lun Pan shall bear the proportional liability limited to the amount of false audit.It puts forward suggestions for the improvement of the above three aspects of civil liability system,hoping to contribute to the establishment of a sound civil liability system for certified public accountants in China.The civil liability judicial practice of certified public accountants in China is still in the initial stage,which is far behind the needs of the development of the current capital market.Therefore,the awareness of professional risk of auditors needs to be improved,the index system of civil liability identification needs to be built urgently,and the market supervision environment needs to play a greater role.We should form three aspects to work together for the reasonable definition of civil liability,and realize the balance between the public interests and the interests of certified public accountants.