Conflict of interest

A conflict of interest is a situation in which a person’s self-interest may interfere with his duty to make a decision in the public interest or for an employer. For example, there is a conflict of interest when a company’s purchasing manager also owns one of the suppliers to which the company issues purchase orders. As another example, a company CEO decides to relocate the company headquarters closer to his personal residence, though doing so will be expensive for the company and require longer commute times for employees.

The presence of a conflict of interest does not necessarily mean that any improper activity has taken place. A good way for an individual to deal with a conflict of interest situation is to state the situation and remove himself from the decision-making process that is causing the conflict.

Related Courses

Ethical Frameworks in Accounting
Professional Rules of Conduct 
Unethical Behavior