Ho Y. Lee Paper Abstract An Empirical Study of Auditor Switch Previous research show that firms tend to grow and expand after they switch to a Big Eight auditor. However, there is little research on the other types of auditor switches, i.e., the switches from a Big Eight to a non-Big Eight, or changes to the auditors of similar size. This paper examines the effects of changes and of magnitudes in risk on the decision to switch auditors for the other three types of auditor switches. In order to examine risk characteristics surrounding auditor switches, this paper employs three risk measures, bankruptcy risk, market risk, and financial reporting risk. To measure bankruptcy risk, I utilize several financial ratios that are commonly used to analyze bankruptcy risk by banks. These ratios include asset growth, profitability, activity, capital structure, and liquidity. For the market risk, I use stock market volatility. For the financial reporting risk, I use abnormal accruals. I compare the auditor switching firms with the control firms. For the auditor switching firms, I find higher bankruptcy risk that would be indicated by the lower increase in asset size and profitability, higher in leverage, and lower in current ratio and interest coverage ratio than for the control firms. The market risk was much higher for the auditor switching firms than for the control firms. However, I am not able to find higher financial reporting risk for the auditor switching firms than for the control firms. University of Oregon Homepage Copyright © 1998 by Department of Accounting, University of Oregon.