If an auditor of financial statements required by the 1934 Act becomes aware of an illegal act,the auditor must:

Question

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under the 1934 Act, an auditor of financial statements is required to inform the issuer's management and make sure the audit committee or the board of directors is adequately informed if they become aware of an illegal act. It is the responsibility of the issuer to notify the SEC and the auditor should resign if the issuer does not take appropriate action. However, there is no requirement for the auditor to notify the SEC directly, nor are they subject to criminal penalties for not doing so.

If an Auditor of Financial Statements Required by the 1934