Jones and Jones, CPA, has a manufacturing client, Widgit Technologies, Inc. (WTI), that is a small, owner-managed business with annual revenues of approximately $8 million. WTI employs a bookkeeper but is not large enough to employ a CPA in-house. WTI regularly asks Margaret Jones, the partner on the engagement, for advice on accounting issues, and Jones and Jones drafts the financial statements for the company. The client reviews the financial statements before they are printed by Jones and Jones with an audit opinion attached. During the current year, WTI asked Jones and Jones to assist the company by rendering a business valuation service. WTI is asking Jones and Jones to (1) estimate the value of WTI and (2) consult with WTI in the form of making recommendations on steps that WTI can take that will grow the value of the business.

Since Jones and Jones is preparing the financial statements for WTI, is Jones and Jones independent with respect to WTI? What conditions, if any, must Jones and Jones meet in order to be independent with respect to WTI?