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:

The partners at LJL frequently hire cars from Dream Holidays Limited (DHL) to visit long-distance clients. DHL is a major client of LJL. DHL gives a 10 percent discount to its loyal customers, including LJL. Recently a tax partner at LJL, Rebecca Holmes, hired a four-wheel-drive from DHL to go on a holiday with her family on the same terms as those offered to LJL.

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