1. The office of Stella and Aurora, CPAs, has two offices, one in Boston and one in Miami. The firm has audited the AJAX Inc. out of its Boston office for the past ten years. For the following case, which occurred during the year under audit, indicate whether the independence of either the CPA involved, or the firm would be impaired: Alonso Wade is the father of Lebron Wade, a Miami partner. Alonso Wade has an immaterial indirect investment in AJAX, Inc. Lebron Wade is unaware of his father's investment and does not participate in the audit for AJAX, Inc.

Select one:

a. Independence is not impaired

b. Independence is impaired

2. Audit evidence is ordinarily more reliable when it is:

Select one:

a. Obtained indirectly or by inference rather than directly by the auditor

b. Provided by copies rather than original documents

c. Generated internally through a system of effective controls rather than ineffective controls

d. Obtained from knowledgeable nonindependent sources inside the client company rather than independent sources