Write answers to situations 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. 

Required: 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 Dennis Cooper CPA has been appointed as a junior auditor of Convergence Accounting Limited (CAL). One of his first tasks is to review the firm’s audit clients to ensure that independence requirements of APES 110 (Code of Ethics for Professional Accountants) are being met. His review has revealed the following:

Watson Partners (WP) is a law firm. CAL has performed the audit of WP’s solicitors’ trust account for many years. The two firms are considering on combing their collective expertise in the luxury small ship cruises industry to set up a ‘one-stop shop’ for small ship luxury cruise dealers. The firms are hoping that the new business capitalizes on the profile of the two firms to woo luxury small ship cruise dealers away from their current advisors.

Answer rating: 100% (QA)

Dennis Cooper CPA a member of the audit engagement team has a material personal stake in XYZ Limited a significant audit customer Potential threats to independence The personal involvement with a big ... View the full answer