Chris Walters has been appointed as a junior auditor of Awesome Accounting Limited (AAL). 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:

AAL has performed the audit of Big Metals Pty Limited (BM), a large proprietary company (NOT public interest entity) for the last two years. AAL has also been providing services related to the preparation of accounting records and financial statements to BM.

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. (5 marks)

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