Star,
I am not a Bible scholar, nor am I a trained relationship counselor, so I will give you my opinion on this matter. Are you freind's spouse also? If so, go to the one having the affair, and explain to that person that you know what's going on, and as an honorable person (not to mention as a Christian) you can not enable this person to continue in this fashion. Tell the adulterer that if he/she doesn't come clean with his/her spouse about the situation, you will have to.
If you are not close to the spouse of the freind, and the freind doesn't know what's going on, keep quiet about it & pray for guidance from the Lord, because if you open that can of worms for your freind, it is very likely that you will lose that freind.