Audit independence in fact is most clearly lost when A. An auditor agrees with the argument made by the client's financial vice president that deferring losses on debt refinancing is in accordance with generally accepted accounting principles even though the auditor knows this is not true. B. A public accounting firm audits competitor companies in the same industry (e.g., Coca-Cola and Pepsi). C. 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. D. An audit team fails to discover the client's misleading omission or disclosure about permanent impairment of asset values.