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.
