Conflict of Interest arises when two conditions are met:
1. The professional is in a relationship or a role that requires exercising good judgment on behalf of the interests of an employer or client and
2. The professional has some additional or side interest that could threaten good judgment in serving the interests of the employee or client. E.g. When an engineer is paid based on a percentage of the cost of the design and there is no incentive for him to cut costs- The distrust caused by this situation compromises the engineers’ ability to cut costs and calls into question his judgement.