Chinese CPA firms were established and initially owned by government bodies. This situation has caused much concern regarding auditor independence in China. A program to disaffiliate CPA firms from their sponsoring body began in 1997, and the purpose of this paper is to investigate whether auditor independence has subsequently improved. We use the number and percentage of non-standard opinions in audit reports as a measure of auditor independence. We found that the number and percentage of non-standard opinions has increased dramatically since 1997. After considering other possible explanations, we attribute the cause for such a change to the disaffiliation program. These results are consistent with the notion that disaffiliated CPA firms face a higher degree of market risk than affiliated firms, and therefore act more independently. Our results thus provide support and justification for the disaffiliation program.