a. Conflict of interest arises when an accountant has a duty to two or more parties. An accountant is obligated to serve two or more parties whose interests may diverge, creating a risk that the accountants‟ judgment or actions could favour one party over another. This situation challenges the accountant‟s objectivity and professional integrity while fulfilling their responsibilities to all parties.

b. Causes of conflict may be any of the following:

i. Conflict can arise when individuals are unclear about their respective areas of responsibility, so that one person believes that another is trying to take away his authority and responsibility. Conflict occurs because each individual believes that he has the responsibility for doing something and it is not the responsibility of the other person;

ii. In the same way, conflict can arise when workgroups are unclear about their respective areas of responsibility. Each workgroup believes that it has the decision-making responsibility and not the other group;

iii. Conflict may occur when one person or group thinks that another person or group is deliberately trying to spoil what he or she is trying to do, by being deliberately unhelpful or critical. For example, there may be conflict between the operations division and finance department of a company, if the operations division management want to invest in new equipment and the finance department management will not allow them to have the money to invest;

iv. In some situations, conflict may occur when two workgroups are pursuing incompatible objectives. Similarly, conflict may occur between management and trade union representatives, because management act in the best interests of the organisation and its owners, and the trade union representatives try to get the best terms of employment for their members;

v. On a personal level, conflict can arise when one individual thinks he can tell another person what to do, but the other person refuses to follow his instructions or recognise his authority;

vi. Conflict may even occur when operational managers are advised by „specialist‟ advisers. The operational managers may feel that the specialists are being deliberately unhelpful in the advice they give. The specialists might feel that their advice is being wasted when it is ignored;

vii. Conflict may occur due to the nature of the work involved, so that for one person or group to „succeed‟, another group has to „fail‟. Operational departments may have conflicts with regulators and checkers (including auditors) for this reason;

viii. Conflict may be „political‟. Political conflict may occur at the most senior level of the organisation, for example among the directors and senior managers of a company. One group of managers and directors may form a „clique‟ that sees itself in conflict with another group, with disputes over matters such as company strategy and senior management promotions and appointments;

ix. Conflict might arise due to personality differences and natural ways of approaching a task. For example, there may be conflict between a conservative employee who favours a measured and structured approach to implementing a new piece of technology (such as reading the instruction manual in full before trying the new system) versus a more adventurous and care-free employee who favours a „try it, see what happens and worry later‟ approach;

x. Non-compliance with rules, regulations and policies can be a common cause for conflict between those breaching the rules and those advocating compliance;

xi. Simple misunderstanding through ineffective communication can be another common cause of conflict in the workplace. For example, written communication may not easily convey body language or elicit constructive dialogue and hence may misrepresent the tone with which it was sent. The message received by the reader may also be biased by the mood of the receiver. Hence a light-hearted joke or reference may be interpreted seriously and cause offence leading to conflict; and

xii. Conflict may arise where quotas and incentives generate competition for a scarce resource. Whilst on the one hand healthy competition can be a good motivator, it can also lead to destructive and divisive behaviour such as sabotage and deliberate misinformation.

c. A stakeholder in an organisation is an individual or entity who has an interest or stake in the activities, outcomes or objectives of the organisation and they may seek to actively influence the decisions, strategies, or actions of the organisation to align with their interests or goals.

d. The main categories of internal stakeholder groups in a company are usually the following.

i. Shareholders The shareholders themselves are a stakeholder group. Their interest is to obtain a suitable return from their investment and to „maximise their wealth‟. However, there might be different types of shareholders in a company: some shareholders are long-term investors who have an interest in longer-term share price growth as well as short-term dividends

ii. Managers Managers are a stakeholder group. They have a responsibility to run the company for the benefit of the shareholders, but they may have their own interests, which may not be the same as those of the shareholders. For example, managers may wish to build the company in a particular way, to provide job satisfaction for themselves, or to diversify from the current product range into new products or markets, for their own interest. They may also seek to increase the size of the company through acquisitions, to increase their status, even though this may not be in the best interest of the shareholders.

iii. Employees Employees are a stakeholder group. They want secure employment with adequate salary levels and job satisfaction. They may have a conflict of interest with shareholders, for example, over the level of profit distribution between dividends for shareholders and retention of profits to provide funding for research and development, which may provide benefits for employees in the longer term.