Questions for Paul Bijou, Deputy Director of Inspections
New York Office of the Public Company Accounting Oversight Board

Q: How far along are you to completing the hiring of inspectors? What specific criteria are you following? Are you limiting your search to auditors with specific professional backgrounds?
Paul Bijou: We have hired and will continue to hire highly experienced auditors and accountants and others to support our mission to oversee the auditors of public companies. Our current inspections team has an average of 23-and-a-half years of prior public accounting experience at the senior staff level and an average of more than 11 years of relevant experience at the manager level. While we do not provide regional office breakdowns of employee numbers, we do expect to hire about 90 new inspectors in 2005 nationally. We are looking to approximately double the size of our inspections staff in New York.

New employees have outstanding professional opportunities at the Public Company Accounting Oversight Board. Our inspectors will directly contribute to achieving the board’s goal of improving the quality of public company auditing in order to restore public confidence in the capital markets. They will have unparalleled opportunities to learn and grow in their profession as they implement our inspection program, by interviewing audit firm personnel, identifying and reporting accounting and auditing issues, and performing detailed industry research.

Q: Besides hiring inspectors, what were the biggest challenges to launching the inspection process?
PB: The biggest challenges were creating and determining the scope of the inspection process, writing the related guides, and the actual limited inspections in 2003 and the regular inspections in 2004.

Q: Is the principal mission of the New York office to inspect the small firms (firms with fewer than 100 issuer clients) in the Northeast region, of which there are 136 currently registered?
PB: The principal mission of the New York office and of all PCAOB offices is to support the directive and mission of the PCAOB. We primarily handle the Northeast region, and have personnel with experience in small firm inspection. All PCAOB offices share resources with other offices across the country. We contribute to the inspection of the large firms; teams are typically pulled from multiple office locations.

Q: In 2003, the PCAOB conducted limited inspections of the Big Four firms. What did the PCAOB learn about the inspection process, and were any adjustments made to improve the process?
PB: Since it was the first time, we were able to learn a lot about the inspection process and were able to incorporate that knowledge into the 2004 inspections.

Q: Has the document request portion of the inspection process proven burdensome, particularly for the very small firms?
PB: We recognize that the request is rather extensive; however, firms have been able to comply. When there has been an issue, we have worked with the firm to get the information to us in the most complete and timely fashion possible.

Q: What advice would you give firms that are awaiting inspection by the PCAOB?
PB: For all firms to do the highest-quality audit work possible and to meet the standards of the PCAOB.

Q: As 2005 begins to unfold, what do you believe will be the greatest challenges and concerns of the New York office and the inspectors in the new year?
PB: The biggest challenge for the New York office will be recruiting high-caliber auditors to fulfill PCAOB’s mission.