Independence risk of advisory work can impair future assurance objectivity if safeguards are not in place. Which statement best reflects this risk?

• A. May impair future assurance objectivity — safeguards required.
• B. May enhance assurance objectivity — no safeguards needed.
• C. Has no impact on assurance objectivity.
• D. Only affects audits of financial statements.

Answer: (A)

Independence and objectivity are essential for credible assurance work. When the same internal team provides advisory services, it creates threats to objectivity in future assurance engagements, such as familiarity, self-interest, or pressure to please management. If safeguards aren’t in place, those threats can bias judgment or reduce skepticism, undermining the trustworthiness of subsequent assurance reports.

Safeguards help keep objectivity intact by separating duties and oversight: clear policies on independence, governance review by the audit committee, rotating staff or roles, strict boundaries between advisory and assurance activities, and documented assessments of any potential conflicts. With these protections, the risk to future assurance objectivity is managed, making the engagement more reliable.

The other options don’t fit because they either ignore the risk, suggest there’s no need for safeguards, or limit the impact to a narrow scope (financial statements only). In reality, advisory work can affect future assurance across engagements, unless appropriate safeguards are in place.