The most appropriate action to take when the auditor finds evidence of potentially illegal activity is to work with the client to report the activity to the appropriate authority. The auditor is a professional who performs an independent and objective examination of the system, the process, or the activity, to provide assurance, evaluation, or improvement. The auditor has a duty and a responsibility to report any evidence of potentially illegal activity that they find during the audit, as it can affect the security, the compliance, or the integrity of the system, the process, or the activity. The auditor should work with the client to report the activity to the appropriate authority, such as the law enforcement, the regulatory body, or the senior management, as it can ensure the cooperation, the communication, or the transparency between the auditor and the client, and it can follow the legal, the contractual, or the ethical obligations of the auditor and the client. The auditor should not immediately call the police, work with the client to resolve the issue internally, or advise the person performing the illegal activity to cease and desist, as they are not the most appropriate actions to take when the auditor finds evidence of potentially illegal activity, as they can bypass, undermine, or interfere with the cooperation, the communication, or the transparency between the auditor and the client, and they can violate the legal, the contractual, or the ethical obligations of the auditor and the client. References: CISSP All-in-One Exam Guide, Eighth Edition, Chapter 7, Security Operations, page 894. Official (ISC)2 CISSP CBK Reference, Fifth Edition, Chapter 7, Security Operations, page 910.