228 Auditors’ Signing Networks and Auditor Independence: Empirical Evidence from Going-Concern Opinions previous studies in measuring degree centrality (Wasserman and Faust, 1994). The degree centrality of auditor k refers to the number of audit partners connected with auditor k as auditor k works with another auditor on a common client. Audit partners with higher degree of centrality are related to more auditors in the network. We estimate model (1) and model (2) to test our hypothesis, and the dependent variable is the going-concern opinion (GC). We also include variables of the company’s characteristics and variables of the auditor’s characteristics and include year fixed indicator variables to control for unobserved time effects: GCit = β0 + β1CPA1_NWit + β2CLIENT_CPA1it + β3PLEDGEit + β4LNTAit + β5LEVit + β6ARINVTAit + β7AGEit + β8SEDit + β9LAGCit + β1 0TEN_CPA1it + β11EXP_CPA1it + β12IMP_CPA1it + β13EXPERT_CPA1it + ∑IND + ∑YEAR + εit , (1) GCit = γ0 + γ1CPA1&2_NWit + γ2CLIENT_CPA1&2 it + γ3PLEDGEit + γ4LNTAit + γ5LEVit + γ6ARINVTAit + γ7AGEit + γ8SEDit + γ9LAGCit + γ10TEN_CPA1it + γ11EXP_CPA1it + γ12IMP_CPA1it + γ13EXPERT_CPA1it + βγ14TEN_CPA2it + γ15EXP_CPA2it + γ16IMP_CPA2it + γ17EXPERT_CPA2it + ∑IND + ∑YEAR + εit . (2) According to H1, we expect the coefficient on CPA_NW and CPA1&2_NW to be statistically significant. 3. Findings We find a significant positive coefficient on CPA1_NW, which suggests that betterconnected auditors are more likely to issue going-concern audit opinions to distressed companies. This effect is economically meaningful. Holding the control variables constant at their mean values, we find that moving from one standard error below to one standard
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