An examination of auditors' reporting intentions when another auditor is offered client employment

An AICPA ethics ruling prohibits auditors from considering employment with a client during the audit engagement in order to minimize the concerns that financial statement users may have regarding the auditor's independence, i n fact or appearance. The objective of this study is to examine auditors' r eporting intentions when it is discovered that another auditor is consideri ng employment with the client and has failed to comply with the ethics ruli ng. We test a model that predicts that auditors' reporting intentions will be influenced by their perceptions of the seriousness of the act, the perso nal costs of reporting, their responsibility for reporting, and their commi tment to the accounting profession. The results indicate that auditors' rep orting intentions are stronger when personal costs of reporting are perceiv ed to be lower or personal responsibility for reporting is perceived to be higher. implications of the findings for audit practice are discussed.