Write answers to each of the five (5) situations described below addressing the required criteria (i.e. 1 & 2) in each independent case. You may use a tabulated format if helpful having Threats, Safeguards and Objective Assessment as column headings. Riley Watson CPA has been appointed as a junior auditor of Lybrand and Joanna Limited (LJL). 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:

John Pougher, the current senior manager on the audit of Heavy Machineries Limited (HML) which specialises in the production of mining equipment, is planning on entering into a business partnership under the name of Seven Seas Cruises (SSC) with the CFO of HML, whereby they will both be equal partners in a business running luxury cruises. John informs Riley Watson that this is not a problem since the two entities (HML and Seven Seas Cruises) are in different non-competing industries.

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