I would tell my sister and her husband that I am aware of what they are doing and that I am planning to call the authorities and that way the yelling and hitting (she said she knows the boy has been struck several times) will at least probably abate somewhat immediately, whereas if you call CPS and explain the situation, it may take a while for them to assign a caseworker, and that's only if and when they even determine it is warranted.
In other words, if you simply call and don't make the sister and her husband aware that the game's up and you ARE calling , the abuse can continue unabated until or even if someone visits to investigate at all.
I once called CPS in a non-professional role as the neighbor of a three year old child that I continually saw being neglected, in the sense that this little girl wandered a riverside park by herself at all hours of the day and night. I was told that they didn't routinely investigate unless they had two or more corraborating calls outlining the same problem or concern. This said to me that unless someone else called and complained - this wouldn't be investigated. I don't know if it ever was or not - I was a stay-at-home mom and my daughter was the same age and we lived across the street, so I just sort of adopted this little girl and took her everywhere with us to make sure she stayed safe. She made it through - thank god.
I guess it also depends on the relationship you have with your sister. Is she stressed out - being married to such an asshole? Maybe she could use your help.
I'd talk to her first because I wouldn't want to do anything so backhanded as call authorities before I spoke to my sister about what was going on and how I might be able to help her. But I know all people are different- maybe you think your sister is an asshole too.
But yeah - I'd talk to my sister NOW so the abuse comes out in the open NOW and maybe stops NOW for that little boy instead of him having to wait for possibly weeks and/or months for CPS to intervene.
I'd predict that 'yelling' would be rather low priority for them, given what else they probably have to deal with, more pressing and obvious abuse situations - in terms of delegating their work force. And if you can't say that you've seen evidence of physical abuse - I'm sure that'll play into how fast they make your nephew's situation a priority.