Question
23. A CPA firm requires recent college graduates joining its audit practice to sign an employment contract that specifically prohibits them from accepting future employment
23. A CPA firm requires recent college graduates joining its audit practice to sign an employment contract that specifically prohibits them from accepting "future employment at any time with any audit client for which they participated as a member of the audit engagement team." Assume that such an agreement is enforceable.
a. What are the pros and cons of such a contract term?
b. If an audit firm asked you to agree to such a contract term as a condition of employment, would you consider this provision to be reasonable? What factors might make you view it as unreasonable?
c. Would you expect a CPA firm to view favorably, or view unfavorably, audit staff members who quit to accept an in-house position employment with an audit client?
d. Would your answer to the preceding question depend on whether the employee quit two weeks before the client's audited statements had to be filed with the SEC?
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