You may use a tabulated format if helpful having Threats, Safeguards and Objective Assessment as column headings.

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.

(E) Norman Jones CA is an audit senior at BBAS. Norman has been currently assigned to the audit of Premier Cruises Limited (PCL). Norman is planning to enter a business venture (Luxury Auto) with the CFO of PCL, whereby they are both equal partners in a business retailing luxury motor vehicles. Norman has informed Stephen that this will not be a problem since the two entities (PCL and Luxury Auto) are in different non-competing industries.