Johnny, FCPA, is the engagement partner on the audit of Yummy Food Services Limited (YFSL). Johnnys sister Rebecca owns a large number of shares in a mutual fund investment company, XYZ, which in turn owns shares in YFSL. Rebeccas investment in XYZ is material to both her and her partner Jack. Reading the investment companys most recent financial report, Johnny is surprised to learn that the XYZs ownership in YFSL has increased dramatically

1. Identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified. (7.5 marks)

2. Provide an objective assessment of whether audit independence can be achieved (7.5 marks)

use APES 110 to answer this question, and please include the rule number and content you used.