Final answer:
The conflict of interest between auditors and management arises due to their different roles and responsibilities. Management aims to maximize profits while auditors ensure the accuracy of financial statements.
Step-by-step explanation:
The conflict of interest between auditors and management arises due to the different roles and responsibilities they have within a company.
On one hand, management aims to maximize profits and may be tempted to manipulate financial statements to present a more favorable picture of the company's performance. On the other hand, auditors are responsible for ensuring the accuracy and reliability of financial statements and must maintain their independence to provide an objective assessment.
This conflict often occurs when management puts pressure on auditors to overlook or downplay financial irregularities, compromising the integrity of the auditing process.