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.