Greg & Associates (Greg) is a large audit firm with clients located around Australia During April 2018, Greg was successful in obtaining a new client, Clear Diagnostics Ltd (BDL), which is one of Australias leading providers of diagnostic imaging services and owns 30 diagnostic clinics across Australia.

Prior to the appointment of Greg as the auditor of BDL for the financial year ended 30 June 2018, some preliminary analysis identified the following information:

- John Silver, one of the assistants at Greg intended to be part of the 30 June 2018 audit team, owns shares in BDL. Johns interest is not material to him.

- Greg was previously engaged by BDL to value its intellectual property. The consolidated statement of financial position as at 30 June 2018 includes intangible assets of $25 million, which were valued by Greg on 1 March 2018, following BDLs acquisition of another diagnostic imaging company. The intangibles are considered material to BDL.

Required:

1. Identify and explain any potential threats to Gregs independence as BDLs auditor.
2. Explain what action Greg should take, if any, to eliminate any potential threats identified in (a.)
3. Identify an appropriate safeguard that Greg could implement to reduce the risk of a similar independence threat occurring in the future.