Final answer:
A close relative cannot hold a key position with an audit client, as it presents a risk of impairing the auditor's independence. This is because the relative could influence the client's financial statements.
Step-by-step explanation:
The independence requirements for a close relative of a covered member in the context of accounting and auditing are designed to prevent conflicts of interest and preserve the integrity of the audit. Among the options provided, c. A close relative cannot hold a key position with an audit client best describes one of these requirements. A close relative holding a key position at an audit client could significantly influence the financial statements or be in a position to exert significant influence over the preparation of the financial statements, which would impair the auditor's independence. In contrast, close relatives can, under certain circumstances, have immaterial, direct or indirect investments in an audit client, and depending on the level and nature of the interaction, not all loans from an audit client would necessarily violate independence requirements.