This question relates to professional auditing, as 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:

1. the demand for audits to increase or decrease? (150 words)
2. clients to shift from large (Big-4) auditors to smaller auditors, or from smaller auditors to Big- 4 auditors? Why or why not? (150 words)