Reference no: EM132565251

Question - You are the audit manager of BBL Associates (BBL), a mid-tier accounting firm. BBL has a large client, Simpsons Ltd. (Simpsons). BBL provides a range of services to Simpsons, including the audit of the financial reports, tax advice, and corporate advisory services. BBL obtains significant non-audit fees from Simpsons.

You are planning Simpsons's upcoming audit. Next year is the twelfth (12th) consecutive year that BBL will audit Simpsons's financial reports. BBL maintains excellent relations with Simpsons. Some members of the audit team have worked on the Simpsons audit for more than 5 years. Simpsons is pleased with the continuity of staff as it enhances the efficiency of the audit.

During the current financial year, Ben left BBL, and commenced work at Simpsons as the Financial Controller. While employed at BBL, Ben was the audit senior on the Simpsons audit.

Required -

(a) Identify three (3) threats to the auditor's independence in relation to the Simpson audit.

(b) Recommend safeguards that should be taken by BBL in relation to each of the threats identified in (i) above. Justify your answer.