Oehlers, CPA, is a staff auditor participating in the engagement of Capital Trust, Inc. Which of the following circumstances impairs Oehlers' independence?

Oehlers' sister is an internal auditor employed by Capital Trust.

Oehlers' friend, an employee of another local accounting firm, prepares the tax return of Capital Trust's CEO.

Oehlers' and Capital Trust's 401K plans own stock with the same corporation.

During the period of professional engagement, Capital Trust and Oehlers discussed business over lunch at a first-class restaurant.