Ethics regarding Conflicts of interest

Conflicts between members and clients
Professional members or firms should not accept or continue an engagement where there is a conflict of interest between the member or firm and its client. The test is whether a “reasonable and informed third party” would consider the conflict of interest as likely to affect the judgement of the member or the firm.

Examples of this might be:

• when members compete directly with a client
• the receipt of commission from a third party for the introduction of a client (for example, an audit firm may be paid a commission by another entity, such as a firm of brokers, for introducing the entity to its client companies).

Safeguards against a conflict of interest between members and clients might include:

• disclosure of the conflict/commission to the client, and
• obtaining the informed consent of the client.