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t when an auditor has deliberately altered or hidden material facts in the audit report thereby causing the users of it suffer damage (4).

An auditor also has a legal responsibility under statutory law. The statutes are the Securities Act of 1933, the Securities Exchange Act of 1934 and the modification by Sarbanes/Oxley Act of 2002. In these acts, companies must file the annual report [audited] to the Securities and Exchange Commission, SEC (Chambers 5-20). The SEC is empowered to discipline, auditors violating ethics or are practicing auditing while unqualified. The sanctions include company deregistration, penalties of a value not exceeding $750,000 and compulsory auditing education. In these two Acts, an auditor can be charge with criminal offence attracting a fine or a sentence of up to five years. The modification by Sarbanes/Oxley Act of 2002 requires that Public Company Accounting Oversight Board (PCAOB) conducts quality reviews in accounting firms that are registered and mandated to audit any company.

3.0审计师的责任过大Auditor liability is too great
Auditor liability in the US is unlimited. The threat of bankruptcy is real; it sank Arthur Anderson implicated in Enron fraud. Koch and Schunk suggest that a common view ties the quality of audit to exposure of auditor liability (1). This has given birth to 'over-auditing' where the costs in the effort for quality audit exceed the audit value. Even the Committee on Capital Markets Regulation acknowledged in 2006 that high effort in audit is proving inefficient. It is a double loss as the auditor pays for liability costs and their reputation suffers (2).

There is a belief especially among the investors that unlimited auditor liability is healthy for auditing quality. In the US at the moment, 'over auditing' induced by the threat of unlimited liability is counterproductive (Koch and Schunk 1). High risk firms are being avoided by the auditors; in some cases, the auditors give an industry a wide berth. Consequently, affected companies cannot raise capital through securities market shriveling their growth; they may collapse eventually. In another scenario, unlimited liability deals the death blow to the auditing firm as demonstrated by the collapse of Arthur Anderson after successful claim of involvement in fraud. Failure of any of the 'Big Four' would disrupt the economy. It would not only sink with its shareholders' equity but it would acutely contract choices for audit services (1). Therefore, a collapse of either large company or an audit firm shocks the economy unfavorably.

The regulators that exercise oversight role in the interest of the public as well as the auditing profession converge on a desire to initiate reforms. For the auditors they are keen to have caps introduced to auditor liability at the earliest chance. Like, in parts of Europe, a cap delimits the liability exposed to the auditor in the circumstances of auditing (Dickey and Minnery 3). A fixed money cap sets the cost of potential liability in monetary figures. Another model of the cap considers the audited company's market capitalization. There is also a cap base of the fee of the audit while the final type relates liability with the extent of auditor's responsibility. The auditors are fronting a second proposal to enjoy 'safety' for auditing done in certain respect such as in high risk companies. Due to common expectation gap, the auditor