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2. Required: Each of the following situations involves a possible violation of the AICPAs Code of Professional Conduct, Rule 101- Independence. The audits are for public companies. Indicate whether each situation violates Independence. Explain why or why not.

(e) Jimmy Saad, a sole practitioner, audited Dallas Conduit, Inc.s, financial statements for the year ended June 30, and was issued stock by the client as payment of the audit fee (after the audit opinion was issued). Saad disposed of the stock before commencing fieldwork planning for the audit of the next years June 30 financial statements.

(f) A partner assigned to a firms New York office is married to the president of a client for which the firms Connecticut office performs audit services. The partner does not perform services out of or for the Connecticut office, cannot exercise significant influence over the engagement, and has no involvement with the engagement such as consulting on accounting or auditing issues.

(g) A CPAs father acquired a 10% interest in his sons audit client. The investment is material to the fathers net worth. The son is aware of his fathers investment and the CPA participates in the audit engagement.

(h) Adrian Reynolds now works as a junior member, staff accountant of the accounting team at Swiss Precision Tooling, a publicly traded manufacturing company. Three months ago, he worked as a staff auditor for Crowther & Sutherland, a local accounting firm, where he worked on the Swiss Precision Tooling audit team. Crowther & Sutherland is still the auditor for Swiss Precision Tooling.

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