Write answers to each of the five (5) situations described below addressing the required criteria (i.e. 1 & 2) in each independent case. You may use a tabulated format if helpful having "Threats", "Safeguards" and "Objective Assessment" as column headings.
Tom Hardy has been appointed as a junior auditor of Awesome Chartered Accountants (ACA). 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:
(c) For the past four years, ACA has been the auditor of Burswood Holiday Resorts Ltd. (BHR). Brock Lesnar CA has been the audit partner responsible. To express sincerity towards ACA and Brock, and to maintain the good relationship in anticipation of another smooth audit for 2016, BHR would like to present a complimentary 3-week holiday package voucher for Brock's Family to Hawaii. All expenses, including accommodation, food, drink and travelling costs, will be paid by BHR.
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