Auditing standards take a risk-based approach to auditor independence, considering independence impaired when sufficient safeguards do not mitigate a threat. We examine whether nonprofessional investors’ perceptions of auditor independence reflect a similar risk-based approach. In an experiment, we find nonprofessional investors perceive auditor independence significantly lower when senior auditors receive a relatively expensive gift than when they receive a token gift. Our results suggest that nonprofessional investors perceive client gifts to auditors pose a threat to independence. We also find investors perceive auditor independence higher when the audit partner communicates receiving gifts to the audit committee, suggesting investors recognize the safeguard role of communications with the audit committee. Under the current rule, auditors can accept token gifts whether or not any safeguards are in place. Our results raise questions about the appropriateness of a rule allowing auditors to receive gifts without also considering whether any safeguards are in place. Finally, our results show that even when auditors communicate receiving gifts to the audit committee, nonprofessional investors perceive independence lower for relatively expensive gifts than for token gifts, suggesting the safeguard does not completely mitigate the threat with respect to perceived auditor independence.