A potentially troublesome situation occurs when an officer or a director, or a corporation in which the officer or director has an interest, enters into a transaction with the corporation. This problem is known as a(n) .

Question

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A conflict of interest occurs when an individual or entity has multiple interests and one of those interests could potentially influence their decision-making in a way that is not in the best interest of another party involved. In the case of an officer or director dealing with their own corporation, their personal interest may conflict with the interests of the corporation or its shareholders, potentially leading to unethical or illegal behavior.

A Potentially Troublesome Situation Occurs When an Officer or a Director