You have recently been promoted to audit manager within your audit firm Gallop LLP. In the course of the audit of Trotter Ltd you have come across the following situations.

a) A spouse and a parent of a member of the audit team owns a material financial interest in Trotter Ltd.

Explain:

• how the relationship is defined within the FRC Revised Ethical standard;

• with reference to the FRC Revised Ethical Standard 2019, what, if any, ethical issues arises in relation to the spouse and the parent;

• if there are any, describe what potential threats arise according to the FRC ethical standards in relation to the spouse and the parent;

• what steps, if any, you should take in order to mitigate any potential risk.