Multi Investment Co$.\text{'}$s investment in Sherman Mfg$.$ makes up $40\%$ of Mult

earnings and $30\%$ of their assets. Robert Landry has an opportunity to aud

owns an immaterial amount of stock in Sherman's stock. Susan Cort owns

immaterial amount of Multi's stock and has an opportunity to audit Sherm

What effect does the stock investments of Landry and Cort have on their

independence with the prospective audit clients Multi Investment Co$.$ and

Mfg$.?$

I. Landry is NOT independent of Multi Investment Co$.$

II$.$ Landry is independent of Multi Investment Co$.$

III. Cort is NOT independent of Sherman Mfg$.$

IV$.$ Cort is independent of Sherman Mfg$.$

I and III

I and IV

II and III

II and IV