When auditors conclude, based on evidence obtained, that an illegal act, a
noncompliance or abuse either has occurred or is likely to have
occurred, they should promptly report relevant information to the
Internal Audit Manager.
- An illegal act is a violation of a law
(theft, fraud) and/ or a State/Federal regulation.
- A noncompliance
is a violation of a provision of a contract or grant agreement.
- Abuse occurs when the conduct of a government organization, program,
activity, or function falls far short of societal expectations for
Whether a particular act is, in fact, illegal may have to await final
determination by a court of law. Thus, when auditors disclose
matters that have led them to conclude that an illegal act is likely
to have occurred, they should take care not to imply that they have
made a determination of illegality.