Question

Appropriate procedural safeguards help reduce threats to objectivity and counter any perception of possible bias. Which of the following is/are not procedural safeguard(s)? (1) Act in a fraudulent manner
(2) Providing peer-review of valuation, if necessary
(3) Non-disclosure of any prior association with the client
(4) Non-disclosure of any possible source of conflict of interest

• A. Only (4)
• B. (2) and (4)
• C. (3) and (4)
• D. Only (2)

Hint:

Full disclosure and peer reviews are essential safeguards to ensure independence and transparency in professional practice.

Answer 1

The Correct Option is D

Step 1: Understanding procedural safeguards.
Procedural safeguards are professional measures designed to maintain integrity, objectivity, and independence. These include transparency, disclosure of conflicts, peer reviews, and adherence to ethical codes.
Step 2: Identifying non-safeguards.
Non-disclosure of prior associations or sources of conflict of interest (options 3 and 4) undermines transparency and may lead to bias. Therefore, they are not procedural safeguards but rather examples of unethical behavior.
Step 3: Evaluation of options.
(1) Incorrect — Acting fraudulently is not a safeguard but is unrelated to the options asked.
(2) Correct procedural safeguard — Peer review enhances objectivity.
(3) and (4) Not safeguards — Non-disclosure of relationships or conflicts hides potential bias.
Step 4: Conclusion.
Thus, (2) is a safeguard. Therefore, the correct answer is (D) only.