Auditor Independence Utilize the AICPA website to respond,

however to respond to this case, please consult not only auditing

standards $($AU$-$C$),$ but also the AICPA$$s revised Code of Conduct.Facts: Tim Smith is an audit partner in a partner in a CPA firm,

and Tim recently invested in a diversified mutual fund managed by

Fidelity Investments. He owns less than $1\%$ of the total shares

outstanding of the mutual fund itself. One of the mutual fund$$s

holding is shares of Lava Corp. Lava Corp is one of Tim$$s clients

and is a nonpublic company.Required: What guidance tells Tim that he must be independent of

Lava Corp, and does his investment impair his firm$$s independence

on this audit?Respond to these questions in the form of an issues memo.

Explain your analysis, citing from the guidance to support your

response. If the guidance states that a $$covered member$$ must be

independent, you will need to define covered member to fully

explain your analysis. Make a clear, reasoned argument, using a

logical discussion of relevant guidance. You can use the following

headers to begin your response.Issue $1$: What guidance requires Tim to be independent of Lava

Corp?Issue $2$: Does this investment impair Tim$$s firm$$s independence

on this audit?