ICAEW SE · Chapter 8 · Question 17 of 18
An accountancy firm is asked to advise two clients who are both bidding to acquire the same company. What ethical issue does this create?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) A conflict of interest
Explanation
A conflict of interest arises when a firm provides services to two or more clients whose interests are in conflict regarding the same matter. Advising competing bidders could compromise objectivity and confidentiality. The firm must identify and evaluate the conflict and decide whether it can be addressed or whether it must decline one or both engagements.
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