Chris Pine is the audit partner in the Chartered Accounting firm of Pine & Associates, (PA). Chris has a substantial investment in Space Ltd, which has just put its audit for the year ended 30 June 2019 out to tender. On 31 October 2018 Chris has submitted a tender bid for the audit of Space.

REQUIRED:

1. Identify and explain the threat to independence. (2 marks)

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2. Determine whether Chris would be able to accept the audit if he won the tender. (2 marks)

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3. Explain whether your answer to (a) (ii) would change if it was Chriss spouse who held the shares. (2 marks)

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2. Explain whether the situation would be any different if, prior to submitting the tender, Chris placed the shares into a blind investment trust where he had no influence over the trusts investments. (2 marks)

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Explain whether the situation would be any different if after winning the tender, Chris disposed of his shares prior to commencing the audit.