SSARS 19 suggests that if an incident of possible fraud or illegal acts rises above the level of clearly inconsequential, then the accountant should consider getting legal advice.
Duh!
(Remember that phrase should consider means the accountant has to consider that step but is not required to take the action under discussion.)
If you come across something that seems like it could be fraud or an illegal act, you are going to look at it two or three more times to make sure you understood it correctly. Then you’re going to consult with rest of your team. Then you are all going to look at it another time or two. If after all that you still think you have an incident of possible fraud or illegal act that is something beyond the inconsequential level, it’s time to check with your attorney.
I don’t think you will need to worry about defining that “inconsequential” cutoff. When you are agitated enough to look at something three or five times, you’re beyond inconsequential.
The good news is that AON and Camico both provide pre-claims assistance at no charge to their policyholders (I have verified that both companies provide that assistance free. Yes free.) Give them a call and tell them you’re looking at a problem. I am sure they would be more than happy to coach you on how to handle the communications with your client. If it is serious enough, they will provide you free time with an attorney. (Yes, free. Does that sound like a price us CPAs can handle?)
So about that talk to your attorney comment? Good advice.