Reference no: EM132680884

Liam Neeson has been appointed as a junior auditor of Brilliant Accounting Limited (BAL). One of his first tasks is to review the firm's audit clients to ensure that independence requirements of APES 110 (Code of Ethics for Professional Accountants) are being met. His review has revealed the following: (d) Rey Steel Limited (RSL) has been a long standing audit client of BAL and is one of the oldest companies listed on the ASX. RSL audit has just been completed for the current year. The engagement partner on the audit, Shawn Michaels CPA, has been the key audit partner on the RSL audit engagement for previous four years. David Lont FCPA is one of the three managing partners at BAL. Directors at RSL have always admired David's skill and expertise. David is planning to retire from BAL. On hearing this, the directors at RSL approach David with a very lucrative compensation package to join the RSL team as a financial controller.

Required: 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:

Question 1. Identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified.

Question 2. Provide an objective assessment of whether audit independence can be achieved