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Conflict of interest

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Conflict of interest

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 31, 2018 at 9:08 pm #434306
    marthew
    Participant
    • Topics: 38
    • Replies: 6
    • ☆

    Hello Mike,

    An audit firm is requested to provide advice on the tender document to supply one audit client by another audit client, the situation will create conflict of interest.

    My question is how does the conflict of interest arise? I can not understand this. Whose interest is being conflicted? the audit firm? or the audit client?

    I think is the audit clients, as the firm could provide sensitive/commercial info they gain from auditing both clients to the other parties. Is it correct?

    Thank you.

    Regards,
    Marthew

    February 1, 2018 at 5:06 am #434346
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23333
    • ☆☆☆☆☆

    Where have you read the scenario? The more common example of conflicts of interest that involve an audit firm and two clients is where the firm is asked to assist in the preparation of a tender (for example a tender for the provision of services) and is then asked by a second client to assist them too in the preparation of a tender for the same provision of services

    The scenario that you have set up causes a problem for the firm in that if the tender is successful and your tendering client is selected by the other client … and then things start to go wrong ( for example your tendering client is not as competent as they have led you to believe) then your own reputation will take a hit vicariously

    In addition, if you assist one client and the second client decides to reject that tender, that leaves both clients unhappy with you

    But I’d still like to know where you have read this comment

    OK?

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Conflict of interest’ is closed to new replies.

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