Auditor Changes in the SOX Era

Abstract

Auditor changes are ongoing; however, significant client realignments occurred in the immediate aftermath of SOX. Using data from 2003 to 2012, this paper explores auditor changes from a longitudinal perspective, and observes, though to a lesser degree, a continuation of the immediate SOX effects. Also observed are the effects of major historic events. The observations suggest SOX established a new normal with respect to auditor change, but historic events alter this SOX trend.