It depends upon where one's loyalty lies.

If you are loyal to the cheater, then I think it's best not to disclose the cheating because that is a betrayal of your friend. On the other hand, if you are loyal to the cheatee, then obviously you would tell them right away if there were cheating going on, or if you even suspected it.

If one is friends with both the cheater and the cheatee, that provides a difficult situation in which one would need to decide how to delicately handle the situation - perhaps by encouraging the cheater to confess and encouraging the cheatee to doubt, or perhaps chosing one person over the other.