sycamore & co - threats to fundamental principles

Sycamore & Co is the auditor of Fir Co, a listed computer software company. The audit team comprises an engagement partner, a recently appointed audit manager, an audit senior and a number of audit assistants. The audit engagement partner has only been appointed this year due to the rotation of the previous partner who had been involved in the audit for seven years. Only the audit senior has experience of auditing a company in this specialised industry. The previous audit manager, who is a close friend of the new audit manager, left the firm before the completion of the prior year audit and is now the finance director of Fir Co. Which of the following identifies the threat which could arise as a result of the finance director's previous employment at Sycamore & Co and recommends an appropriate safeguard? - A familiarity threat; a different audit manager should be appointed ( correct answer ) -A familiarity threat; the firm should resign from the engagement I would really appreciate it if you could tell me why the second option is the wrong answer as in my opinion, isn't there a significant threat due to the finance director previously being a part of the audit team and thus familiarity with regard to audit plans and procedures ? Thank you.