| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 101 === The frequent financial scandals recently suggests that the associations between corporate government and fraud. And the corporate fraud is always associated with its auditor. Thus the auditors are declined to accept the engagement of the client whose corporate governance is poor for causing audit failure which may lead to litigation or indemnification. Compared with non-big4 auditors, big4 auditors pay more attention to its own reputation and thus they are more likely to reject the engagement of the client with high risk. As a result, the company with weaker corporate governance is more likely to switch from the big4 auditors to the non big4 auditors. Using the companies which change its auditor in year 2002 to 2007, this study examines whether the corporate governance mechanism influence the type of successor auditor. The empirical results show that the client with weaker corporate governance have more probability to switch from the big4 auditors to the non big4 auditors. Besides, the auditors are always influenced by the auditing environment. The sanction against to auditor results from the Procomp scandal in year 2004 is the most serious recently. As a consequence, this study further examines the effect of Procomp scandal on auditor engagement decision, the empirical result shows that the effect of clients’ corporate governance on auditors’ engagement decision becomes more obvious after the Procomp scandal.
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