Auditor independence and human capital: Complements, not substitutes

Abstract

Pandey et al. (2026) examine whether the auditor independence provisions of Sarbanes-Oxley (SOX) impact accounting careers and human-capital development. I discuss how the paper shows that independence regulation affects not just the economic ties of auditors and clients, but also the organization of work through which auditors develop human capital. I interpret the evidence as identifying both intended and unintended consequences of independence rules on accountants’ learning, networks, and mobility. The paper adds an important labor-market cost dimension to the evaluation of SOX, but I argue it should be read as informing independence regulation rather than making a case against it. The broader implication is that auditor independence and human capital are complementary inputs into audit quality, which creates a regulatory design problem of protecting auditor objectivity while sustaining expertise.