227 NTU Management Review Vol. 31 No. 3 Dec. 2021 peers (Francis and Yu, 2009). In addition, auditors might have reputational concerns about how the actions of other auditors in their firms influence the perception of the firm brands (Dugan and Spurgeon, 2002). Therefore, well-connected auditors receive more oversight and may raise auditors’ feelings of accountability by increasing audit effort (Tan, 1995). However, well-connected auditors may also have a negative impact on audit quality. Guan et al. (2016) and He, Pittman, Rui, and Wu (2017) use the Chinese audit market as the research settings and find that the audit quality suffers if alma mater connections exist between the auditors and manager or audit committee members. Su and Wu (2021) examine how bad auditing practices can spread through auditor networks. They argue that the information transmitted in the network includes not only professional knowledge and experience but also behaviors that hurt the audit quality. Su and Wu (2021) also find that auditors who have previously teamed up with those sanctioned by regulators for audit failures are more likely to issue lenient audit opinions, and their audited accounting numbers are more likely to be overstated, compared to those who have no overlap with sanctioned auditors in their work experience. Overall, the impact of relationships among auditors on audit quality depends on the trade-off between the benefits and the costs of being well-connected auditors. We propose the following hypothesis: H1: Ceteris paribus, the strength of auditors’ signing networks is associated with the possibility of auditors issuing going-concern audit opinions. 2.2 Methodology The sample consists of publicly traded firms listed on the Taiwan Stock Exchange and the Taipei Exchange from 2006 to 2015. We obtain individual auditor identities and client financial information from the Taiwan Economic Journal (TEJ) database. As we examine the influence of auditors’ signing networks on the possibility of auditors issuing going-concern audit opinions, we focus on the publicly traded firms identified as distressed and audited by the Big 4 audit firms in Taiwan. The Taiwanese audit market provides a unique setting to examine the effects of signing networks of auditors, as regulations not only require that the financial reports of public companies be audited by two audit partners but also that the identity of the audit partners be disclosed. We use two measures as proxies for the strength of the signing networks of audit partners: (1) degree centrality of the lead auditor (CPA1_NW) and (2) degree centrality of the lead and the concurring audit partner (CPA1&2_NW). We follow
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