There may well be a material indirect interest in an audit client as a result of this most recent purchase by the mutual fund. Elbert owns a material amount of stock and if the mutual fund in turn invests a large portion of its money in an audit client of Elbert, Elbert in essence has a material investment in an audit client. Simply because the mutual fund's investment has increased dramatically in the audit client does not mean there is a material investment, however. It may for example have increased from one percent to three percent of the total holdings of the mutual company. Nevertheless Elbert must evaluate whether the holding could be a material indirect investment, in which case it would be a violation.