Possible impairment of auditor independence has been a longstanding concern of regulators, legislators and market participants (SEC, 2000; Sarbanes-Oxley 2002 (SOX); PCAOB, 2010). This study investigates whether auditors acted with less independence for clients that were able to impose pressure on audit fees during the severe economic downturn of 2007– ۲۰۰۹٫ Auditor independence sometimes requires auditors to take positions that client managers will dislike (DeAngelo, 1981; Watts and Zimmerman, 1986). The modification of an audit report for going concern (GC) reasons is a decision likely to displease client managers. Thus, following prior studies that have investigated possible auditor economic dependence on the client (as discussed in Carson et al., 2013; DeFond and Zhang, 2014), our proxy for auditor independence is auditors’ willingness to issue first-time GC modified opinions to financially distressed clients. The economic downturn examined in this study is the ‘‘Great Recession”,۱ which began in the U.S. in December of 2007 and officially ended in June of 2009 (NBER, 2010). The effects of the Recession, however, lingered for more than an additional year and imposed severe financial pressures on many companies.2 We view the Recession as an important setting in which to revisit the issue of auditor independence for the following reasons. First, a GC modified opinion imposes significant economic costs on a client firm, such as negative stock returns and increased risk of client business failure (Mutchler, 1984; Menon and Schwartz, 1987; Geiger et al., 1998; Kausar et al., 2009). Thus clients sometimes pressure auditors not to issue first-time GC opinions and dismiss auditors who do issue such opinions (Carcello and Neal, 2000, 2003). The economic costs to clients associated with receiving GC opinions are likely to have increased significantly during the Recession when availability of financing was limited even for companies not stigmatized by GC opinions. Clients therefore might have been more averse than usual to the prospect of receiving GC opinions during the Recession, whereas the numbers of companies deserving such opinions probably increased.3 Prior studies examining auditors’ willingness to issue GC opinions generally do not find that auditors compromise their independence for important clients (DeFond et al., 2002; Li, 2009; DeFond and Zhang, 2014), although those studies are conducted during periods with less severe economic conditions.4 The extent to which auditors maintain their independence in a very stringent economic environment, characterized by increased client financial distress and reduced audit revenues, is unknown.5 It is plausible that auditors were more reluctant than usual to risk losing clients during the Recession, which was a period of downward pressure on audit fees and of increased financial challenges for auditors (Ettredge et al., 2014). Therefore, the Recession provides a unique setting in which managers of many firms were likely to have had stronger incentives to avoid receiving GC opinions, and auditors were also under greater pressure not to lose clients due to already reduced audit revenues. Whether auditors are able to maintain their independence with respect to desirable clients in this situation is unknown. The independence of auditors in relation to their GC decisions has also attracted the attention of regulators. The PCAOB is concerned that downward pressure on audit fees might cause some auditors to take cost cutting actions that could compromise audit quality (PCAOB, 2010, 26). The PCAOB noted that as the economic crisis (Recession) developed, the risk in certain audit areas increased, including the ability of clients to continue as going concerns (PCAOB, 2010, 4). The PCAOB specifically cautioned auditors to focus on this area of audit risk (PCAOB, 2008, 15).