The main purpose of this study is to analyze the effects of various manager types of firm and the auditor switching in the environment of implementing the corporate governance as well as increasing the manager's and the auditor's legal liabilities, and understand the strategies that are chosen by the manager and the auditor. We suppose the manager must raise funds outside to complete a risky project in various manager types of firm, and we consider a two period game theoretical model between the manager and the auditor. The backward induction concept is applied to derive the possible equilibrium and conditions to sustain them. Our main results are: it is easier to maintain auditor independence and to induce the manager to report honestly if the firm's management composed of professional managers. In the environment of implementing corporate governance and increasing the manager's and the auditor's legal liabilities, the more the firm separates its management and ownership, the less the collusion between the manager and the auditor, and it will lead the auditor to maintain independence and the manager to report honestly.