Mark Calaway has been appointed as a junior auditor of West Accounting Limited (WAL). 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:

(a) WAL has been recently approached by Ultimate Sports Limited (USL)

audit client to

conduct its audit. The accountant at USL, William Ferguson is the son of Sarah Ferguson

, who is an audit partner at WAL

. Sarah will not be involved with the USL audit.

(b) WAL has also recently been approached by Western Mining Limited (WML) to conduct

its audit. The accountant at WML, Stephanie Gellar is the wife of David Gellar who is an

audit partner at WAL. David has shown interest to lead the WML audit.

(c) WAL has performed the audit of Tasty Food Pty Ltd. (Tasty Food), a large proprietary

company for the last two years. WAL has also been providing services related to the

preparation of accounting records and financial statements for Tasty Food.

(d) James Grage CA is an assurance manager with WAL and it has just been decided to allocate

him to the audit of Super Tech Limited (STL). His wife Anni Grage has recently received

some inheritance from her grandfather with which she previously planned to buy a large

parcel of shares in STL. James has recently informed Mark that he has been able to finally

convince Anni to only buy a small parcel of shares in STL.

(e) Chris Henry CPA is a partner in WAL and has been recently assigned as the engagement

partner on the audit of Osborne Grocers Limited (OGL). Charlotte Flair CA is another

partner in WAL who works in the same office as Chris. Charlotte is not working on the

OGL audit. Charlotte's husband Zack is planning on purchasing significant shares in OGL.

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.

2. Provide an objective assessment of whether audit independence can be achieved