(d) The requirement is to identify the appropriate
course of action when threats to independence are discovered.
Answer (d) is correct because the firm should evaluate the significance
of the threats and apply safeguards, if necessary, to reduce
them to an acceptable level. Answer (a) is incorrect because
the firm would only resign if appropriate safeguards could
not reduce the threats to an acceptable level, or it is required
based on a prohibition. Answer (b) is incorrect because the firm
would not notify a regulatory body at this point. Answer (c) is
incorrect because the firm would document the issue, but only
after it is resolved.