Conflict of interest

It’s best to declare a conflict of interest in writing because it will enable the employee to show any auditors or investigators later that he or she responded properly. And if management subsequently fails to deal with the matter appropriately, it will face difficult investigation questions rather than the employee who held — but correctly declared — the conflict.

DETECTION

When it comes to investigating corruption, establishing the conflict of interest is key to establishing the motive for the corrupt activity. In addition, awareness of the link can also assist in formulating detection strategies. The fraud examiner is most likely to be interested in identifying conflicts of interest that haven’t been declared.

Failure to declare is most likely to arise in one of two main situations:

An employee with a conflict of interest may not necessarily engage in corruption; however, management may view a failure to declare with a high degree of professional skepticism and could lead the investigator to finding more serious misconduct.