Which of the following statements is correct about auditor independence?

Even if the auditor is independent in appearance, he may not be independent in fact.

Financial relationship with the clients is the only potential way that auditor independence could be impaired.

The auditor will not lose his$/$her independence as long as he$/$she does not have any financial relationship with the audit client.

Managerial relationship with the client will cause the auditor to lose independence in appearance, but will not affect the auditor's

independence in fact.