An auditor has two distinct responsibilities regarding illegal acts. First, an auditor must thoroughly understand all existing accepted auditing standards to be equipped to recognize the potential for illegal acts. Once an auditor has uncovered the potential for such violations then it is equally prudent to understand the personal responsibilities an auditor must bear and the necessary actions that accompany an irregular audit. The government has well intentioned regulations enacted to protect individuals and organizations from an action or an omission that violates or influences the material reliability of a financial statement or audit. Illegal acts committed by clients must segregate activities that do not include the entity that is having their financial statements audited. Equally, illegal acts also include the acts of management or individuals that act in the interest of the aforementioned entity. Although the responsibility to recognize illegal acts is important to the auditor, it is not the burden of an independent auditor to determine culpability or render judgment. Aga......

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