Determinants of Audit Firm Change in the United States

Abstract

This master thesis investigates the determinants of audit firm change in the United States before and after implementation of the SOX. Prior literature shows mixed findings based on different methodologies. This thesis will provide a comprehensive research, based on 1803 auditor changes in the US between 2000-2015. The results show that the only factors that influence auditor changes are firm size, return on assets and whether or not the current auditor is a Big 4 auditor. Moreover, the likelihood of auditor change decreased after the SOX implementation, which is a signal of the effectiveness of this regulation.