Christopher Brown has been appointed as a junior auditor of Apex Chartered Accountants (ACA). One of his first tasks is to review the firm's 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:

Michael, FCPA is an engagement partner at ACA. ACA has recently been appointed the auditor of Awesome Ferries Limited (AFL). AFL has been providing ferry services in Perth for the past 15 years. Michael has received a request to participate in the current year's audit engagement of AFL. Michael's financially independent daughter, Serena has a shareholding in AFL.

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.