Question $2\mathrm{.}3($Total:$54$ marks$)$

Ace$-$It Racquets Inc. is a public company that manufactures and sells tennis racquets. The company has expanded internationally, and its auditors have resigned due to the fact that they have insufficient staff to meet the needs of the expanding business. In light of this fact, Ace$-$It Racquets has approached your firm, Tick Mark Titans LLP$,$ to take on the audit going forward. As part of client acceptance procedures, Tick Mark Titans LLP must conduct an independence threat analysis. Below is a list of relationships.

Required

$1.$ For each Tick Mark Titans LLP staff member below, explain the type of potential threat$($s$)$ to independence, determine whether or not the threat is significant $($and explain why$)$ and recommend a possible safeguard $($if any$)$ that can minimize the threat. Fill out the table below:

Identify threat$($s$)$ to Independence $($leave blank if none$)$Evaluate Significance of ThreatIf Significant, Identify $\backslash$& Apply SafeguardsToni Kowalsky, partner

Toni and Ace$-$It Racquets's CEO, Roger, run a local summer tennis camp together. Toni and Roger became friends when they both worked at Ace$-$It Racquets. Toni left her role as finance VP at Ace$-$It Racquets $18$ months ago.Patrick Sholer, senior manager

Patrick is a big tennis enthusiast and bought Ace$-$It Racquets tennis racquets for himself and his family. $\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|\}$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Chris Washolc, manager $\backslash \backslash$

Chris worked in Ace$-$It Racquet's internal audit department on review of payroll system controls, but left Ace$-$It Racquets two years ago.

$\backslash$end$\{$tabular$\}$ & & & $\backslash \backslash$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Sam Rivers, audit senior $\backslash \backslash$

Sam owns $1000$ Ace$-$It Racquets shares, inherited from his father's estate.

$\backslash$end$\{$tabular$\}$ & & & $\backslash \backslash$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Yolanda Ladna, audit senior $\backslash \backslash$

Yolanda plays on a semi$-$competitive volleyball team with four of Ace$-$It Racquets employees.

$\backslash$end$\{$tabular$\}$ & & & $\backslash \backslash$

$\backslash$hline $\backslash$begin$\{$tabular$\}\{$l$\}$

Anna Madras, audit junior $\backslash \backslash$

Anne's father is a finance VP at Ace$-$It Racquets's parent company, which is listed on the TSX$.$

$\backslash$end$\{$tabular$\}$ & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$