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Utilizing client-provided payroll records in an audit or review engagement does not inherently impair independence, as long as appropriate safeguards and professional skepticism are exercised. Independence is primarily concerned with the auditor's ability to remain unbiased and free from conflicts of interest during the audit process.

When auditors use client-provided information, it is standard practice to corroborate this data with external evidence or through substantive testing to ensure its reliability. As long as auditors validate the payroll records and apply critical judgment when interpreting the data, their independence is maintained. The reliance on client data is a common part of the audit process; the key is that it should be treated with appropriate professional scrutiny.

In contrast, options suggesting that the use of client records always impairs independence or does so only under specific conditions may misunderstand the nature of independence in the context of auditor responsibilities. The emphasis is on the auditor's ability to critically assess and verify the information provided, rather than the mere act of using client data itself. Thus, with the right protocols, the independence of the auditor can indeed be preserved while utilizing client-provided payroll records.