Conflict Of Interest

Business, Legal & Accounting Glossary

Definition: Conflict Of Interest




What is the dictionary definition of Conflict Of Interest?

Dictionary Definition


n. a situation in which a person has a duty to more than one person or organization, but cannot do justice to the actual or potentially adverse interests of both parties. This includes when an individual’s personal interests or concerns are inconsistent with the best for a customer, or when a public official’s personal interests are contrary to his/her loyalty to public business. An attorney, an accountant, a business adviser or realtor cannot represent two parties in a dispute and must avoid even the appearance of conflict. He/she may not join with a client in business without making full disclosure of his/her potential conflicts, he/she must avoid commingling funds with the client, and never, never take a position adverse to the customer.


Full Definition of Conflict Of Interest


conflict of interest is a situation when a firm or agent benefits from both sides of an issue, or in investing is hired by an individual to represent his best interests but works for or has a business relationship with the other side of the issue.

Common conflicts encountered in investing include-

  • The financial planner who advises you to invest in products or services that his firm is paid to represent. Load funds and annuities are common examples. One can wonder if the advice is in the best interest of the client.
  • The analyst who recommends a buy of stock in a company that generates large fees with the same firm for investment banking services such as a new stock issue or the arrangement of other financing. Panning the stock might result in loss of the investment banking business.

Efforts are made to limit such conflicts and many are mentioned in news reports, but enforcement seems lax or inconsistent. Investors must watch out for their own best interests.


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Modern Language Association (MLA):
Conflict Of Interest. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 20, 2021 https://payrollheaven.com/define/conflict-of-interest/.
Chicago Manual of Style (CMS):
Conflict Of Interest. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/conflict-of-interest/ (accessed: September 20, 2021).
American Psychological Association (APA):
Conflict Of Interest. PayrollHeaven.com. Retrieved September 20, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/conflict-of-interest/

Definition Sources


Definitions for Conflict Of Interest are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th August, 2021 | 4 Views.