Write an answer to the situation described below addressing the required criteria (i.e. 1 & 2) in each independent case. You may use a tabulated format if helpful having Threats, Safeguards and Objective Assessment as column headings.

Christopher Brown has been appointed as a junior auditor of Apex Chartered Accountants (ACA). One of his first tasks is to review the firms audit clients (all public interest entities) to ensure that independence requirements of APES 110 (Code of Ethics for Professional Accountants) are being met. His review has revealed the following:

1. Johnny, FCPA, is the engagement partner on the audit of Yummy Food Services Limited (YFSL). Johnnys sister Rebecca owns a large number of shares in a mutual fund investment company, XYZ, which in turn owns shares in YFSL. Rebeccas investment in XYZ is material to both her and her partner Jack. Reading the investment companys most recent financial report, Johnny is surprised to learn that the XYZs ownership in YFSL hasincreased dramatically.

For each of the independent situations above, and using the conceptual framework in APES 110 (Code of Ethics for Professional Accountants), answer the following questions:

1. Identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified.

2. Provide an objective assessment of whether audit independence can be achieved