After reading the transcript of the conversation between Mitch and you (AJ) (below), please answer the following questions:

1. Identify the type of the potential independence threats that are referenced in the discussion between the audit junior and Mitch and explain if the independence threat is in fact or appearance.

The following is a conversation between you, audit junior, and Mitch Bray, the other junior assigned to the Hillsburg audit engagement.

MB: Hey. Did you update your social media profiles?

AJ: No, not yet.

MB: I added, BBK LLP. as my current place of employment to my Twitter, LinkedIn, Instagram and Facebook profiles. A couple of weeks after updating my LinkedIn profile, I was actually contacted by a recruiter asking me if I would be interested in a job opportunity at another public accounting firm.

AJ: Oh wow, did you respond back to the recruiter?

MB: No, not yet. Anyway, I wanted to talk to you about something that came up.

AJ: Yes?

MB: Do you remember my friend Peter?

AJ: Yeah, Peter. His parents own a small paint store.

MB: Yes, that Peter. He is trying to help out his parents with their store and came up with a social media advertising campaign to promote Hillsburgs Dureux paint. He hopes this will turn around the stores declining sales.

AJ: Hillsburg? The same Hillsburg we are going to begin auditing next week?

MB: Yes, the same Hillsburg. Peter asked me for a favour, and I dont know what to do.

AJ: What did he ask you for?

MB: Peter wants to give me a couple of cans of the Hillsburgs Dureux paint for free. In return he wants me to post a photo of the painted room on my social media accounts saying how great the Hillsburgs Dureux paint is. He also wants me to tweet a link to his parents store website and the Hillsburgs Dureux paint website. He is asking all of his friends to do the same hoping that this promotion goes viral.

AJ: Were you planning to paint your room?

MB: Yes.

AJ: Well, then maybe you should take advantage of the offer.

MB: I think I might. There is also something else.

AJ: Yes?

MB: You know that girl Sarah that I was telling you about?

AJ: Your new girlfriend Sarah?

MB: It turns out that my new girlfriend works at Hillsburg.

AJ: No way!

MB: Sarah just got promoted to be the manager of the accounts payable (AP) department at Hillsburg.

AJ: Well, I guess you must be happy about Fran (audit senior) assigning you to the accounts payable section on the Hillsburg audit?

MB: For sure. Sarah is such an amazing hardworking girl. We have been dating for just three months, but everything has been working out great so far. We are thinking of moving in together and starting a family.

AJ: Wow!

MB: I always wanted to get married and have kids and I feel that Sarah is the right girl for me. She just got promoted to the manager position. When her probation ends in about 3 months, she will get a big pay bump. With her new increased salary and my income, together we could qualify for a mortgage that would let us buy a condo together. Alone neither one of us could afford to buy a place to live. Now Sarah just needs to impresses her boss at Hillsburg and get that permanent position.

AJ: Who is Sarahs boss?

MB: Hillsburgs CFO. If Sarah passes her probation, the CFO will make her the full-time manager of AP and she will get the big pay increase. This will let us get that condo together.

AJ: Amazing. I hope that everything works out for the two of you. I will just go back to swiping on Tinder! Maybe I will get lucky and finally find someone.

MB: Ha-ha. You will.