Jones, an audit partner at Miller & Co., CPAs, is considering entering into a business relationship with Smith, the CFO of one of his audit clients. Which statement best describes the application of the AICPA independence rules to this situation?

a.) Jones may not have a joint closely held investment with Smith if the investment is material to Jones.

b.) Jones may not have a cooperative arrangement with Smith under any circumstances.

c.) Jones may enter into a business relationship with Smith but not the audit client itself.

d.) Jones may obtain a waiver from the company's creditors to make the investment.

Please explain why the answer is b. I believe the answer is a. it does not state in the question that the company being audited is a public company