You had been recently promoted to Senior Auditor of the audit firm Jose Rizal and Associates and was asked to

consider the following independent situations:

One of your audit clients, Amethyst Pty Ltd (APL) is a large superannuation fund. The Australian Taxation

Office has advised APL that it has rejected its taxation treatment of a material amount of income from

investments and that it disagrees with the taxation advice APL gave to its members. The matter has been

referred to the Superannuation Complaints Tribunal and APL has requested that you represent them at the

Superannuation Complaints Tribunal

Question:

(a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

(b) Explain what safeguards, if any, that could be implemented to reduce the independence threats. (4

marks)

(c) Assess whether audit independence can be achieved. (4 marks)