audits optal Tool QUESTION COMPLETION STATUS: You are an experienced audit manager at Samway Baker Fitzgerald (SBF), an accounting firm with offices in Orange, Wagga Wagga, Tamworth, Port Macquarie and Albury in NSW, Toowoomba in Queensland, and Ballarat in Victoria. Although a medium-sized firm by national standards, SBF includes Australia's largest regionally based auditing practice. You have recently been asked to review the firm's audit clients to ensure that the independence requirements of APES 110 are being met. You note the following: 1. Paterson Partners (PP) is a law firm. SBF has performed the audit of PP's solicitors' trust account for many years. Recently, the two firms agreed to combine their collective expertise in the software industry to set up a 50/50 joint venture 'one-stop shop' for software entrepreneurs. To date, SBF has funded all costs relating to establishing the new business and is carrying the 50% owing from PP as a loan receivable. The new business, called Soft Central Pty Ltd, hopes to capitalise on the profile of the two firms to woo software entrepreneurs away from their current advisers. 2. Newbridge Limited is a listed construction company. The engagement partner's wife, Jacqui George, recently purchased a significant number of shares in Newbridge on the advice of her financial planner. Required For each of the independent situations above, and using the conceptual framework in APES 110, answer the following questions: a. Identify potential threats to independence. (2 marks) b. Recommend two (2) safeguards to reduce the independence threats. (4 marks) c. Provide an objective assessment of whether audit independence can be achieved. (4 marks) In the answer box below, write the letter and your answer. e.g. a. Your answer Consider using the following table format to provide your answers: Threats Safeguards Objective assessment 1