A. In the course of conducting an audit to which this article applies, if the independent certified public accountant detects or becomes aware of information indicating that an illegal act, whether or not perceived to have a material effect on the issuer's financial statements, has or may have occurred, the independent certified public accountant, in accordance with generally accepted auditing standards, as modified or supplemented by the commission, shall:

1. 1. Determine whether it is likely that an illegal act has occurred and, if so, shall determine and consider the possible effect of the illegal act on the financial statements of the issuer, including any contingent monetary effects such as fines, penalties and damages.
2. 2. As soon as practicable, inform the appropriate level of the issuer's management and ensure that the issuer's audit committee or board of directors in the absence of an audit committee is adequately informed about any illegal acts that have been detected or have otherwise come to the attention of the certified public accountant in the course of the audit, unless the illegal act is clearly inconsequential.

B. After determining that the audit committee or board of directors is adequately informed pursuant to subsection A, as soon as practicable, the independent certified public accountant shall report the accountant's conclusions to the board of directors if the independent certified public accountant concludes that all of the following have occurred:

1. 1. The illegal act has a material effect on the financial statements of the issuer.
2. 2. The senior management has not taken, and the board of directors has not caused senior management to take, timely and appropriate remedial actions with respect to the illegal act.
3. 3. The failure to take remedial action is reasonably expected to warrant departure from a standard report of the auditor, when made, or warrant resignation from the audit engagement.