Guanxi & Auditor's Independence: social connections Theory Test

On the one hand, auditors seek to maintain public interest by accrediting financial statements and on the other hand, they need to keep in touch with their clients in order to earn income. Therefore, one of the main concerns of the profession, legislators and the general public is when these two categories conflict with each other. This research will consider the relation between guanxi and auditor's independence based on social connections theory. For this purpose, in 1396, 249 questionnaires distribute and collect between auditors working in an audit organization and institutions of Iranian Association of Certified Public Accountants randomly and the data obtained from them has been analyzed using the structural equation modeling. In this research independent variable is guanxi and dependent variable is auditor's Independence. The result of research shows that whatever the tendency to guanxi between Auditors is the more, increase the likelihood of defeat your independence even the professional controls. This research showed that guanxi culture is an effective factor in the relationship between auditor and audit client in the country's audit market. Auditors try to keep in touch with their clients to make their judgment consistent with their relationship with their clients. This subject shows that relationship and social connections can have a negative impact on the independence quality of auditing.