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The questions that follow are based on Rule 101 of the AICPA Code of the Professional Conduct as it relates to independence and family relationships.

The questions that follow are based on Rule 101 of the AICPA Code of the Professional Conduct as it relates to independence and family relationships. Check yes if the situation violates the rules, no if it does not. a. Kraemeer & Kraemeer recently won the audit of Garvin Clothiers, a large manufacturer of women's clothing. Jock Kraemeer had a substantial investment in Garvin prior to bidding on the engagement. In anticipation of winning the engagement, Kraemeer placed his shares of Garvin stock in a blind trust. Does this violate the independence rule?

b. A partner assigned to a firm's New York office is married to the president of a client for which the firm's Connecticut office performs audit services. If the partner does not perform services out of or for the Connecticut office, cannot exercise significant influence over the engagement, and has no involvement with the engagement, such as consulting on accounting or auditing issues, is the firm's independence impaired? c. A CPA's father acquired a 10% interest in his son's audit client. The investment is material to the father's net worth. If the son is aware of his father's investment and the CPA participates in the audit engagement, is the firm's independence impaired? d. Steve Rackwill, CPA, has been asked by his audit client, Petry Plumbing Supply, to help implement a new control system. Rackwill will arrange interviews for Petry's hiring of new personnel and instruct and oversee the training of current client personnel. Petry Plumbing is a privately held company. Petry will make all hiring decisions and supervise employees once they are trained. Does this violate the independence rule?

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