See below. A Question of Independence

Jack works for Red, Blue and Green CPAs. Each year Red, Blue and Green asks Jack to fill out a form indicating all of his

financial interests and those of his family members and close friends. Red, Blue and Green uses these charts to ensure

that their auditors comply with the independence standards as described by the AICPA Code of Professional Conduct.

Interpretation $101-1$ of the Code of Professional Conduct contains examples of situations that may impair an auditor's

independence. Relationships are divided into three categories for purposes of the interpretations: immediate family, close

relatives, and other relatives and friends. It is important for an auditor to understand how existing relationships fit into

these categories so that the auditor can determine if there is an effect on his or her independence.

Understanding of relationships is of primary importance to understanding the auditor's Code of Professional Conduct regarding

independence. Place the following relationships into the appropriate category.

Immediate Family

Close Relative

Other Relative or Friend