Ethics and the ASWB Exam: 1.06 Conflicts of Interest

Ethics are the foundation of Social Work, shaping not only how professionals serve their clients but also how they navigate complex, real-world situations. One of the most commonly tested and most misunderstood areas on the ASWB exam is Section 1.06 of the NASW Code of Ethics: Conflicts of Interest. It’s a topic that touches every Social Worker at some point in their career, and it’s absolutely essential to understand how these situations can blur boundaries and jeopardize the trust that’s central to our work.

Section 1.06 doesn’t just lay out rules; it defines how Social Workers maintain integrity when faced with overlapping relationships, personal benefits, or outside influences that can compromise judgment. Whether it’s being offered a gift, working with someone you know personally, or navigating dual roles in a small community, these situations aren’t always cut and dry. That’s what makes this topic both so important and so tricky to master for the ASWB exam.

In this post, we’ll break down what Conflicts of Interest really mean, explore examples you could see on the test, and offer a realistic practice question with rationale to sharpen your skills. Plus, if you’re studying for the ASWB exam, we’ll show you how Agents of Change can be a great prep partner, offering live study groups, flashcards, full-length practice exams, and access until you pass. Let’s take the confusion out of 1.06 and turn it into confidence.

Learn more about the ASWB exam and create a personalized ASWB study plan with Agents of Change. We’ve helped tens of thousands of Social Workers pass their ASWB exams and want to help you be next!

1) What Is Section 1.06: Conflicts of Interest?

Section 1.06 of the NASW Code of Ethics addresses Conflicts of Interest, which are situations where a Social Worker’s personal, financial, or professional interests could interfere with their obligation to act in the best interest of the client. These scenarios can happen more easily and more often than you might think. That’s why the Code is so specific in outlining responsibilities.

Here’s the full text of Section 1.06 from the NASW Code of Ethics:

1.06 Conflicts of Interest

(a) Social Workers should be alert to and avoid conflicts of interest that interfere with the exercise of professional discretion and impartial judgment.
(b) Social Workers should inform clients when a real or potential conflict of interest arises and take reasonable steps to resolve the issue in a manner that makes the clients’ interests primary and protects clients’ interests to the greatest extent possible. In some cases, protecting clients’ interests may require termination of the professional relationship with proper referral of the client.
(c) Social Workers should not take unfair advantage of any professional relationship or exploit others to further their personal, religious, political, or business interests.
(d) Social Workers should not engage in dual or multiple relationships with clients or former clients in which there is a risk of exploitation or potential harm to the client.
(e) When Social Workers provide services to two or more people who have a relationship with each other (for example, couples, family members), Social Workers should clarify with all parties which individuals are considered clients and the nature of the Social Worker’s professional obligations to the various individuals who are receiving services.
(f) Social Workers should avoid communication with clients using technology (such as social networking sites, online chat, email, text messages, telephone, and video) for personal or non–work-related purposes.
(g) Social Workers should transfer clients to other professionals when personal, legal, financial, or other conflicts arise that may impair their professional judgment or increase the risk of harm to clients.

Now, let’s break down each of these sub-sections and explore what they actually mean—especially in the context of the ASWB exam.

(a) Avoiding Interference With Judgment

This part emphasizes being self-aware. If a Social Worker has a bias or personal connection that could cloud their thinking, they have to recognize it early and steer clear. This could mean declining to work with someone they know from another setting or pausing before taking a case that triggers a personal issue.

In practice? You might be asked whether it’s ethical to provide therapy to a family friend. The answer hinges on whether impartiality can be preserved, and usually, it can’t.

(b) Addressing Conflicts Openly

If a conflict of interest does emerge, transparency is key. Clients should be informed, and any decision made should keep their well-being front and center. If the conflict can’t be resolved appropriately, the relationship may need to end, with a solid referral in place.

On the exam, look for scenarios where a Social Worker is navigating a tricky overlap and must choose the most ethical way forward. It’s rarely about “sticking it out,” it’s about protecting the client’s interests first.

(c) No Personal or Professional Exploitation

This one’s clear: the Social Worker’s role is to serve the client, not to benefit from them. That means no promoting your side hustle, no political persuasion, and absolutely no using the relationship for favors.

Even something as simple as inviting a client to a church event can be seen as crossing the line here. The ASWB may frame these questions in subtle ways, your job is to spot the misuse of power.

(d) Dual or Multiple Relationships

Dual relationships aren’t always avoidable, especially in small towns or niche communities, but they should always be assessed for harm. If there’s any risk that the relationship could exploit or damage the client, it’s unethical.

The test loves this topic. You might be asked if it’s okay to accept a former client’s wedding invitation or hire a current client’s partner to paint your office. When in doubt? Say no.

(e) Defining Roles Clearly in Multi-Person Services

In couples, family, or group therapy, boundaries can get blurry fast. This section stresses that Social Workers must clarify who the actual client is and communicate that clearly with all involved.

Expect exam questions that ask about confidentiality in family therapy or what to do when members of a couple want individual sessions. Clarity and documentation are your best tools.

(f) Keeping Tech Communication Professional

Just because you can text or connect on social media doesn’t mean you should. Non-professional tech communication opens the door to dual relationships and blurred boundaries.

For ASWB purposes, be cautious of any activity that suggests friending, messaging, or interacting with clients through personal social media accounts. The ethical response is always to keep it strictly professional or avoid the interaction entirely.

(g) Transferring Clients When Judgment Is Affected

If a Social Worker realizes they can’t continue helping a client objectively due to personal conflict, legal entanglements, or emotional involvement, they must refer the client to another provider.

This part gets tested when the worker’s objectivity is compromised. You might see a question where a Social Worker is developing romantic feelings for a client or finds themselves in legal opposition with one. The ethical move? Step back and ensure the client gets continuous, unbiased support.

This section of the NASW Code of Ethics holds immense weight on the ASWB exam and in real-life Social Work. Understanding each clause of Section 1.06: Conflicts of Interest gives you the insight to make better decisions, protect clients, and uphold the integrity of your profession.

Agents of Change packages include 30+ ASWB topics, 2 free study groups per month, and hundreds of practice questions so you’ll be ready for test day!

2) Why Conflicts of Interest Matter on the ASWB Exam

Ethical questions are a cornerstone of every ASWB exam, regardless of the level you’re taking. And when it comes to ethics, conflicts of interest are one of the most commonly tested and commonly misunderstood topics. Section 1.06 of the NASW Code of Ethics isn’t just theory; it shows up in real case scenarios that test your judgment, your understanding of boundaries, and your ability to protect clients.

Let’s explore why this topic deserves your full attention and how it can show up in different forms on your exam.

It’s About Trust and Professionalism

At the heart of every conflict-of-interest scenario is a question of trust. The exam aims to determine: can you recognize when a boundary is becoming blurry? Can you act in the best interest of the client, even if that means saying no, stepping back, or referring out?

Here’s what the ASWB is really assessing with these questions:

Awareness: Do you notice when personal or financial interests are influencing care?
Clarity: Can you define professional roles in complex relationships?
Action: Are you willing to take steps—even uncomfortable ones—to protect the client?

If you can show you understand these principles, you’re already thinking like a Social Worker.

Conflicts Often Hide in Familiar Situations

On the exam, conflict-of-interest questions aren’t always labeled obviously. Sometimes, they show up in friendly, everyday scenarios that don’t look unethical, until you think a little deeper.

Here are some examples you might see:

A client asks you to support their GoFundMe.
A former client offers you a discount on home repairs.
Your supervisor encourages you to provide therapy to a colleague’s child.
A couple in therapy wants individual sessions with you on the side.

These all carry red flags—even if they seem harmless at first glance. Your job is to spot the ethical gray zones before they become ethical violations.

It’s a High-Yield Topic—No Matter Your Exam Level

Whether you’re taking the Bachelors, Masters, or Clinical exam, ethics questions account for a significant portion of your score. Conflicts of interest fall under the broader domain of Professional Ethics and Values, and they’re especially prevalent in:

Boundary questions
Termination and referral scenarios
Dual relationship dilemmas
Use of self-disclosure or personal gain

Expect to be tested on:

When to refer a client to another provider
Whether a relationship is ethically acceptable
How to respond to offers, gifts, or requests outside of sessions
The appropriate use of technology and social media

Being able to spot and respond to these situations quickly can save you time and points on the exam.

They Connect Directly to Real-World Practice

The ASWB exam isn’t just testing academic knowledge. It’s trying to determine: can this person be trusted with real clients in real situations?

Conflicts of interest happen more often than we’d like to think, especially in settings like:

Small towns or rural communities
Private practices
Schools or churches
Online therapy platforms

By mastering this content, you’re preparing for life after licensure too. You’ll already know how to respond when a friend asks for “a quick counseling session” or a client starts texting about personal matters.

How to Spot a Test Question About Section 1.06

Some conflict-of-interest questions are direct, but many are disguised in situational language. The best way to approach these is to look for anything that seems to:

Create a dual relationship
Offer a personal or financial benefit to the Social Worker
Blur professional boundaries
Involve clients interacting outside of session
Include ambiguous roles or unclear confidentiality

Ask yourself:

“Who benefits in this situation?”
“Is there any risk of exploitation or harm?”
“Would I be fully objective if I continued working with this client?”

If something feels ethically “off,” it probably is.

By fully understanding why conflicts of interest matter on the ASWB exam, you’re giving yourself a huge advantage. This isn’t about memorizing definitions; it’s about learning how to think like an ethical professional. And once you know how to do that, you’re one step closer to passing your exam—and starting your Social Work career with confidence.

3) ASWB Practice Question: Conflicts of Interest

A Social Worker in a small rural town begins seeing a new client for therapy. After the first session, the Social Worker realizes the client is a distant cousin of her husband. The client appears unaware of this connection. What is the MOST appropriate action for the Social Worker to take?

A. Continue working with the client since the relationship is distant and the client is unaware.
B. Disclose the connection to the client and allow them to decide whether to continue services.
C. Terminate services immediately and refer the client to another provider without explanation.
D. Seek supervision to determine whether the relationship presents a conflict of interest and how to proceed.

Correct Answer:

D. Seek supervision to determine whether the relationship presents a conflict of interest and how to proceed.

Rationale:

D is correct because when a potential conflict of interest arises, the NASW Code of Ethics (1.06(b)) encourages Social Workers to take reasonable steps to resolve it in the client’s best interest. In this case, the relationship may or may not impact the worker’s objectivity. Seeking supervision is a responsible, professional first step to assess whether continuing services is appropriate and what safeguards may be needed.
A is incorrect because continuing without acknowledging the connection ignores the potential for a boundary issue. Even distant family relationships can complicate therapeutic dynamics, especially in small communities.
B is incorrect because it places the burden on the client to make an ethical judgment. While client input matters, it’s the Social Worker’s professional duty to assess conflicts and protect client interests proactively.
C is incorrect because immediate termination without exploring the situation or offering an explanation is abrupt and may harm the client. Ethical standards require thoughtful resolution and proper referral if necessary.

4) FAQs – Code of Ethics: 1.06 Conflicts of Interest

Q: What should I do if a client offers me a gift? Is it always unethical to accept it?

A: It depends on the context, but gifts from clients are often a red flag. According to Section 1.06 of the NASW Code of Ethics, accepting gifts can create a conflict of interest, especially if the gift influences your professional judgment or creates an obligation.

In most cases, it’s best to politely decline and explain your reasoning to the client. That said, if a small token is culturally significant or given at the end of services, consult with your supervisor first. On the ASWB exam, assume the safest, most ethical response unless the question provides clear cultural or supervisory context.

Q: Are dual relationships ever acceptable in Social Work practice?

A: While dual relationships should be avoided when possible, the NASW Code acknowledges that they can sometimes be unavoidable, especially in rural areas, tight-knit communities, or specialized populations. The key is assessing whether the dual role presents a risk of harm or exploitation.

If it does, it’s ethically necessary to avoid or terminate the professional relationship. If the dual relationship is unavoidable, you must take steps to protect the client’s interests, such as consulting with a supervisor, documenting your decisions, and clearly outlining professional boundaries. On the ASWB exam, dual relationships that involve any risk of exploitation are generally considered unethical.

Q: How many conflict-of-interest questions can I expect on the ASWB exam?

A: There’s no exact number, but questions related to ethics, including conflicts of interest, dual relationships, and professional boundaries, make up a significant portion of the exam. Depending on your exam level, ethical decision-making may account for 10 to 20 percent of your total score.

You can expect to be asked at least a few questions that specifically address Section 1.06: Conflicts of Interest. These questions often come in the form of real-world case scenarios, so understanding how to apply the Code in context is essential. To prepare effectively, focus on practicing questions and scenario-based review tools, such as those offered by Agents of Change, to strengthen your ethical reasoning.

5) Conclusion

Conflicts of interest aren’t just technical details; they’re central to ethical, trustworthy Social Work practice. Section 1.06 of the NASW Code of Ethics reminds us that professional boundaries must be clear, consistent, and client-centered. Whether it’s avoiding dual relationships, declining inappropriate gifts, or recognizing when our objectivity is at risk, this section calls on Social Workers to act with integrity in every decision. Understanding these concepts deeply will not only help you pass the ASWB exam, but it will also help you protect your clients and your professional reputation throughout your career.

The ASWB exam is designed to test how you think as a Social Worker, especially when faced with ethically complicated situations. Mastering Section 1.06 requires more than memorization. It means learning to assess risk, prioritize client welfare, and seek supervision when appropriate.

If you’re committed to getting licensed and staying ethically grounded, start preparing now. Conflicts of interest may seem subtle, but they can have serious consequences if not properly managed. With the right mindset and the right support, you can enter the exam and your professional life, ready to make choices that reflect the true values of Social Work.

► Learn more about the Agents of Change course here: https://agentsofchangeprep.com

About the Instructor, Dr. Meagan Mitchell: Meagan is a Licensed Clinical Social Worker and has been providing individualized and group test prep for the ASWB for over 10 years. From all of this experience helping others pass their exams, she created the Agents of Change course to help you prepare for and pass the ASWB exam!

Find more from Agents of Change here:

► Facebook Group: https://www.facebook.com/groups/aswbtestprep

► Podcast: https://podcasters.spotify.com/pod/show/agents-of-change-sw

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Disclaimer: This content has been made available for informational and educational purposes only. This content is not intended to be a substitute for professional medical or clinical advice, diagnosis, or treatment.

Ethics and the ASWB Exam: 1.06 Conflicts of Interest

Ethics and the ASWB Exam: 1.06 Conflicts of Interest