Choice "D" is correct. Under DOL rules, independence is impaired when an auditor also serves as an investment advisor to the employee benefit plan.
Choice "a" is incorrect. Under DOL rules, independence is not impaired when an auditor audits both the employee benefit plan and the financial statements of the plan sponsor.
Choice "c" is incorrect. Under DOL rules, an actuary from the auditor's firm may provide services to the employee benefit plan without impairing independence.
Choice "b" is incorrect. Under DOL rules, independence is not impaired when a former employee of the plan works for the audit firm, as long as the employee has completely disassociated from the plan and does not participate in auditing the plan's financial statements for any period of the individual's employment with the plan.