226 Auditors’ Signing Networks and Auditor Independence: Empirical Evidence from Going-Concern Opinions Auditors’ Signing Networks and Auditor Independence: Empirical Evidence from Going-Concern Opinions Min-Jeng Shiue, Department of Accountancy, National Taipei University Shu-Ling Yeh, Department of Accountancy, National Taipei University Ching-Yi Chen, Department of Accountancy, National Taipei University 1. Purpose The purpose of this study is to examine the relationship between auditors’ signing networks in CPA firms and improved/impaired auditor independence, where auditor independence is replaced by auditors’ propensity to issue going-concern audit opinions. Theoretically, economic agents (audit partners) within the same social network (signing networks) can either improve contracting efficiency by reducing information asymmetry or seek rents by promoting collusive behaviors (Kwon and Yi, 2018). Recent empirical studies have provided mixed evidence for whether social ties between audit clients (CEO, audit committee, etc.) and their audit partners improve or impair audit quality (Krishnan, Raman, Yang, and Yu, 2011; Jeanjean, Marmousez, and Sirois, 2013; Bruynseels and Cardinaels, 2014; Guan, Su, Wu, and Yang, 2016; Kwon and Yi, 2018). We follow the path of these social network studies in auditing, but focus only on the auditor partners’ social ties in CPA firms because only a few studies have examined the auditing effects of social ties in CPA firms and provide limited evidence (Bianchi, 2018; Su and Wu, 2021). 2. Research Design 2.1 Hypothesis Development The association between auditors’ connectedness and audit quality can be viewed from the following two perspectives. First, well-connected auditors may obtain information benefits and enhance their expertise, which results in better audit quality (a positive impact). Bianchi (2018) argues that auditors’ collaboration provides a channel to transfer knowledge and finds that well-connected auditors develop knowledge through collaboration which leads to higher audit quality. Furthermore, better-connected auditors can also have more channels for informal benchmarking and communication during an audit (Vera-Muñoz, Ho, and Chow, 2006), or have more opportunities to consult with
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