Section 301 of the Corporations Act requires companies to have their financial reports audited. Academic research suggests that Big-4 auditors charge higher fees than other auditors and their audit reports are more credible than those issued by other auditors. Required: In times of economic recession would you expect:

(a) the demand for audits to increase or decrease? (100-150 words)

(b) clients to shift from large (Big-4) auditors to smaller auditors, or from smaller auditors to Big4 auditors? Why or why not?