Conflict of interest

Gentlemen
We have external auditors on board. Some are in the audit department. And we were their client at one point in time. The bank sees them as bright young men and offers them a job. I see this as a conflict of interest. There must be some type of regulation, which prohibits hiring the bank external auditors unless they leave their job for a certain period of time. Any comments?

No, they can be hired. The only document that could cover this is an agreement with the former CPA, stating that the bank will not hire CPA employees for a specific time period. If there is no document in place, they can be hired just like anyone off the street.

The CPA firm's independence can be impaired (under AICPA and SEC rules) depending on specific factors regarding the responsibilities of the employee with the firm and with the auditee. See page 13 of this document.

It seems to me that Sarbanes Oxley addresses this, although at a much higher level position than the poor grunts doing all the work. Many of our CPA-required positions have been filled by former auditors from the Big 4 firm we used.