Research On The Civil Liability For Certified Public Accountants’ False Statement

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.Although my country’s relevant legal system has been gradually improved over the years,and its provisions have become more detailed and clear,in reality,false statements are still repeatedly prohibited,and the audit quality has not been significantly improved.Instead,audit failures have occurred from time to time,and more and more of CPAs are caught in it and cannot escape,which has a huge negative impact on the entire industry.This thesis firstly summarizes and sorts out the domestic and foreign academic literatures closely related to the research on the civil liability of CPA’s misrepresentation,mainly focusing on the four aspects of CPA’s tort liability and object,the elements of civil liability,causality and the configuration of civil liability.Then,it introduces the definition and classification of the civil liability of certified public accountants.The certified public accountants in the accounting firm issue false audit reports due to violations of the "Securities Law" and misleading statements,major omissions or false records in their audit faults.,when the user of the report suffers economic losses due to relying on false statements to make investment decisions,the responsibility of the accounting firm and the corresponding certified public accountant shall be defined as the civil liability of the certified public accountant.There are four main elements to be identified as civil liability: the CPA’s illegal act,the CPA’s subjective fault,the investor’s loss,and the causal relationship.It can be attributed to the principle of fault liability,the principle of no-fault liability or the principle of presumption of fault.Based on the theory of efficient market hypothesis,fraudulent market theory and "deep pocket" theory,this thesis interprets the determination of civil liability for false statements from the theoretical level.Secondly,taking Lixin Certified Public Accountants and Jinya Technology as a case,it introduces the financial fraud of Jinya Technology from the aspects of fictitious prepaid accounts,false increase of monetary funds,false increase of procurement costs and illegal occupation of funds by major shareholders.condition.As its audit institution,Lixin issued a "standard unqualified audit report",which caused huge losses to investors,and thus suffered administrative penalties and civil lawsuits.Lixin was sentenced to bear joint and several liability with Jinya Technology..Starting from the four major elements of civil liability,this thesis analyzes the determination of Lixin Accounting Firm’s civil liability for misrepresentation,and finds that Lixin has major negligence in the audit process of Jinya Technology and should be jointly and severally liable for compensation.And it also studies and discusses the civil liability configuration within Lixin Accounting Firm and between it and Jinya Technology.For the distribution of civil liability between Lixin and Jinya Technology,due to the gross negligence of Lixin,the compensation amount should be divided equally with Jinya Technology.The internal responsibility allocation of Lixin Firm should be divided according to the division of responsibilities of its partners and personnel in the audit project team.Combining the background of frequent audit failures of certified public accountants,through in-depth understanding and research of the cases,this thesis has the following conclusions about the civil liability of certified public accountants for false statements:(1)The fault division standard is vague and there is no clear concept,and the case is controversial.The main reasons;(2)The responsibility allocation outside the accounting firm should be divided according to the different types of CPA’s faults;(3)The responsibility allocation within the accounting firm should be divided according to the different division of labor of each partner.Finally,in view of the above conclusions,this thesis puts forward the following suggestions:(1)Unify and standardize the standards and procedures of fault identification of certified public accountants;(2)Reasonably standardize the way and scope of civil liability;(3)Set up the internal repayment order and proportion of the firm.