You work for Hamilton Makepeace, a mid-tier firm of accountants as an audit manager. One of your portfolio of clients is Mama Joans Plc which runs a chain of pizza restaurants and is listed on the Alternative Investment Market (AIM) on the UK stock exchange. The companys year-end is 31st December. You are currently planning the final stage of the audit after the companys year-end. The Finance Director of the company has indicated that she is keen for you to complete the audit more quickly this year than last year, to enable an early release of the companys results. She has asked if the audit fee this year could be based on a percentage of the companys profit before tax. She believes this should result in a lower audit fee than for last year. As an incentive, she has said that vouchers offering a years free supply of pizzas would be made available to each member of the audit team. In addition, she would look favourably upon any tender made by Hamilton Makepeace for forthcoming IT consultancy work required by the company. As well as the audit your firm currently provides taxation services to the company, preparing corporate tax returns and providing tax planning advice. The audit fee for the previous year has not yet been paid in full, with 50% remaining outstanding. The company had previously agreed that this would be paid by 31st December. The company currently has no audit committee but intends to introduce one in the near future. The Finance Director has asked if a senior member of staff from your firm would be willing to chair the committee. In addition, she has enquired whether your firm would also be involved in the recruitment process for a new non-executive director to also serve on the committee. Required: a) Identify SIX ethical threats which may affect the independence of Hamilton Makepeaces audit of Mama Joans Plc; b) For each threat, explain which category used in the IAASB Handbook is relevant, and which fundamental principle (or principles) may be at risk; c) For each threat, describe in detail relevant safeguards which might be put in place to reduce the threat to an acceptable level.