Symptoms
When trying to deploy a Workflow that has SharePoint Integration and starts when Item is Added we receive and Access Denied error.
Diagnoses
This is usually associated with missing List Permissions or similar. However, we ended up finding out that the Smartobject's scope was not set to List/Libraries, and would not be able to be used in a workflow. This caused the Access Denied issue.
Resolution
Issue resolved by changing the scope of the Smartobject from None to List/Library in the K2 Settings > Smartobject form.