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:

Fast Machineries Limited (FML) has been an audit client of AAL since the past two years. AAL has recently completed a review of internal controls for FML. AAL has been requested by FML to take responsibility to design and implement a new software system that will form a significant part of internal controls over FML's financial reporting process.

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