Under the ICAI Code of Ethics, when a CA in service IDENTIFIES a CONFLICT OF INTEREST, the typical response is to:
AAllow the conflict to resolve itself without disclosure
BDisclose only to senior management, not to the affected parties
CWithdraw entirely from any matter where a conflict exists
DDisclose the nature of the conflict and how threats are addressed to relevant parties, (b) Obtain CONSENT from relevant parties to undertake the activity with safeguards applied
Answer & Solution
Correct answer: D. Disclose the nature of the conflict and how threats are addressed to relevant parties, (b) Obtain CONSENT from relevant parties to undertake the activity with safeguards applied
Conflict of interest framework — first attempt to ELIMINATE the threat (e.g., withdrawal from the relevant decision-making process). If elimination isn't possible, apply SAFEGUARDS (restructuring duties, segregating responsibilities, obtaining oversight) AND obtain disclosure + consent from the affected parties. Full withdrawal is one option but not the only path — disclosure with safeguards + consent is also valid.
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