Auditors must maintain both the fact and appearance of independence if they are to maintain their respected role in the business community. Consider each of the following independent situations. Using the material in the text, comment on whether the subject is within professional guidelines for maintaining independence. Discuss whether you believe the auditor is within guidelines for independence on those for which there is no clear precedent.

a. A firm audits a small business client for whom it also provides data processing services.

b. Trish \& Co. audits Robert and David Co., a large, publicly held client for whom it also provides data processing services and tax work.

c. An audit staffer who works for Danny and Doug's Audit Firm owns a small amount of stock in one of the firm's clients, Susan Corp. The staffer is not assigned to the audit.

d. An audit manager who reviews some of the work on the Billy Co. engagement owns a small amount of stock in Billy Co.

e. A senior partner occasionally makes appearances at board of directors' meetings for one of his clients to discuss management strategies.

f. The audit manager for the Harriet Bank engagement carries a credit card issued by that bank with a \(\$ 5,000\) credit limit. The card has been borrowed against up to its limit. The audit manager is in some financial distress.

g. Both Maureen \& Co., CPAs and one of their clients, Carolyn Corp., a tennis ball manufacturer, are involved in a suit where both are named as defendants in an investment fraud. Neither the audit firm nor the manufacturer plan on coordinating its defense with the other.

h. Graeme Jones, a senior partner of a local accounting firm, serves on the board of directors of Margaret Co. Although no audit relationship exists between the accounting firm and Margaret Co., most of Margaret Co.'s major competitors are audited by Graeme's firm.

i. Heitger and Godwin, CPAs, perform auditing services and consulting services for Tabor Corp. There are no members of the audit engagement team who work on the consulting engagement.