Choice "C" is correct. Under Rule 101 of the Code of Professional Conduct regarding independence, a member's independence is impaired with respect to a client who is more than one year overdue in the payment of professional fees. An attestation engagement, such as an audit, requires independence of mind and in appearance. Fees from prior work must be paid in full before the issuance of a report on the following year's work.
Choices "b" and "a" are incorrect. Neither of these answers would provide for the fees to be paid before the issuance of the report on the current year financial statements.
Choice "d" is incorrect. Burrow would not accept an engagement of this type, and the fees related to the prior year work would not be paid before the issuance of the current year report.