B$.27$ Audit independence in fact is most clearly lost when

a$.$ A public accounting firm audits competitor companies in the same industry $($e$.$g$.,$ CocaCola and Pepsi$).$

b$.$ An auditor agrees to the argument made by the client's financial vice president that deferring losses on debt refinancing is in accordance with generally accepted accounting principles.

c$.$ An audit team fails to discover the client's misleading omission of disclosure about permanent impairment of asset values.

d$.$ A public accounting firm issues a standard unmodified report, but the reviewing partner fails to notice that the assistant's observation of inventory was woefully incomplete.

B$.28$ The audit committee's responsibility for auditor independence concerns

a$.$ Ensuring that partners of the public accounting firm are not stockholders in the company.

b$.$ Ensuring that nonaudit services provided by the auditor do not impair independence.

c$.$ Reporting on auditor independence to the PCAOB.

d$.$ Ensuring that all nonaudit services are provided by auditors who do not perform the financial statement audit.

B$.29$ AICPA members who work in industry and government must always uphold which two of the following AICPA rules of conduct?

a$.$ The Independence Rule.

b$.$ The Integrity and Objectivity Rule.

c$.$ The Confidential Client Information Rule.

d$.$ The Acts Discreditable Rule.