Dennis Cooper CPA has been appointed as a junior auditor of Convergence Accounting Limited (CAL). One of his first tasks is to review the firms 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:

(d) The now retired founding partner of CAL, Mr. Thompson, has long operated a small proprietary company (not a Public Interest Entity) through which he and his brothers own several investment properties. CAL has performed the annual audit (as per the companys constitution) for the past two years. In addition, it also processes the journal entries prepared by Mr. Thompson, extracts the trial balance and prepares the financial report.

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.