If an error is found in a previously prepared return, what is the appropriate action for the member?

Notifying the client about the error and explaining the necessary steps for correction is the appropriate action because it adheres to the principles of transparency and professional responsibility. As a CPA, maintaining open communication with the client is crucial, especially when it involves correcting previous errors that could impact their financial situation or tax obligations.

This approach ensures that the client is fully aware of the issue and can make informed decisions moving forward. It also fosters trust in the professional relationship, showcasing the CPA's commitment to ethical standards and client service. A proactive stance, where the CPA takes responsibility for informing the client, aligns with the ethical obligation to put the client's interests first and to uphold the integrity of the profession.

The other options either lack the necessary communication with the client (as in fixing the error without informing them) or may not adequately protect the client's interests (such as waiting for the client to discover the error or informing the IRS without prior client notification). Hence, notifying and discussing the error with the client is the most ethically sound course of action.