To mitigate independence risk in advisory work, which is true?

• A. Safeguards are optional.
• B. Safeguards are required to maintain assurance objectivity.
• C. Safeguards apply only to external audits.
• D. Safeguards only matter for financial reporting.

Answer: (B)

Safeguards are required to maintain assurance objectivity. When advisory work is done for the same client, the professionals involved can face independence threats—like pressure to please the client, familiarity with the client’s processes, or involvement in activities that later have to be audited. Implementing safeguards helps prevent these threats from biasing judgment and preserves the credibility of the assurance work. Examples include separating the advisory activity from the assurance function, ensuring leadership of the assurance engagement is independent, rotating personnel, bringing in an independent reviewer, and disclosing any conflicts or threats to independence to governance bodies such as the audit committee. These measures are applied to maintain objectivity across various assurance engagements, not just those tied to financial reporting. The other statements imply safeguards aren’t required, are limited to external audits, or pertain only to financial reporting, which isn’t correct—independence safeguards are essential wherever there is potential independence risk.