What question did this study set out to answer?

This research aims to assess how employment with former client firms affects the independence of CPAs.

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March 18, 2026

Employment Effects on Auditor Independence .

Key Points

This research aims to assess how employment with former client firms affects the independence of CPAs.
Reported CPA firm data on auditors leaving public accounting for client firms
Studied reactions to a hypothetical case involving auditors and ex-client firms
Evaluated the influence of time lapse and auditor rank on perceived independence
Perceived independence severity varied between user groups and CPAs
Time lapse between auditing and employment significantly influenced perceptions of independence
Rank of the ex-auditor affected responses from both groups

Abstract

Abstract ABSTRACT: This research was designed to evaluate the potential independence problem posed by CPAs who accept employment with ex-client firms. First, CPA firm data concerning how frequently auditors actually leave public accounting to accept employment with client firms is reported. Next, the reactions of selected users of accounting data and CPAs to a hypothetical case are studied. The case is designed to permit the impact of two variables on perceived independence to be evaluated: (1) the time lapse between auditing and working for a client firm; and (2) the rank of the ex-auditor. The results revealed that the perceived severity of the independence problem was different for the two groups, and that the time and rank variables significantly influenced the responses of both the users and the CPAs.

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Employment Effects on Auditor Independence .

Key Points

Abstract

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