Indicate below whether or not$$the following situation would be considered a violation of one of the four$$SEC principles for determining auditor independence:

The auditor of ADCS Co$.$ has a substantial investment in ADCS$$s major competitor. Stock returns are such that there is no impact on the competitor$$s stock price when ADCS performs well, and there is no impact on the competitor's stock price when ADCS does poorly.

This is a violation of the SEC$$s principle indicating that the auditor should not be in a position to advocate for the client

This is not a violation of the SEC$$s principles of auditor independence.

This violates the SEC$$s principle indicating that the auditor should not have a mutual or conflicting interest with the client.

This violates the SEC$$s principle indicating that the auditor should not audit his or her own work.