MAA303 Audit And Assurance - Chapter 2: Ethics, Legal Liability And Client Acceptance

2.30 Client acceptance decision

You are part of the audit team at DDD Partners, tendering for the audit of WaterFun for the 2015 financial year. During your review of an Australian Securities and Investments Commission (ASIC) company extract for WaterFun, you note that DDD holds an interest in WaterFun. The interest is material to DDD.
Required:
What is the threat to compliance with the fundamental principles?
Explain whether any safeguards could be put in place to reduce the threat to an acceptable level.
Would it make any difference to your answers if the shares were held by a tax partner in the office, rather than being held directly by DDD?