Reviewing the scenarios given bellow, we need to make sure that independence requirements of APES 110 (Code of Ethics for Profession Accountants) are being met. If not, identify potential threats to independence and recommend safeguards if any to reduce the threat.

(a) Watson Partners (WP) is a law firm. CAL has performed the audit of WP's solicitors' trust account for many years. The two firms are considering on combing their collective expertise in the luxury small ship cruises industry to set up a 'one-stop shop' for small ship luxury cruise dealers. The firms are hoping that the new business capitalizes on the profile of the two firms to woo luxury small ship cruise dealers away from their current advisors.

(b) 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 company's 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.