Client importance. The nature of the auditor–client relationship
presents a natural threat to auditor independence
because auditors have incentives to retain fee-paying clients
(Mautz andSharaf,1961; DeAngelo,1981).
The financial dependence on “important clients”
prompted the Cohen Commission to conclude that complete auditor independence is a practical impossibility
(AICPA,1978).
Contrary to regulators’ concerns,and consistent with theory
(Zhang, 1999),