An accountants' report was appended to the financial statements of Worthmore, Inc., a public company. The statements consisted of a balance sheet as of November 30 and statements of income and retained earnings for the year then ended. The first three paragraphs of the report contained the wording of the standard unqualified report, and a fourth paragraph read as follows:

Required:

a. Was the CPA firm of Bell & Davis independent with respect to the audit of Worthmore, Inc.'s financial statements? Explain.

b. Do you find Bell & Davis' report satisfactory? Explain.

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The wives of two partners of our firm owned a material investment in the outstanding com- mon stock of Worthmore, Inc., during the fiscal year ending November 30. The aforemen- tioned individuals disposed of their holdings of Worthmore, Inc., on December 3 in a transac- tion that did not result in a profit or a loss. This information is included in our report in order to comply with certain disclosure requirements of the Code of Professional Conduct of the American Institute of Certified Public Accountants. Bell & Davis Certified Public Accountants