Last week, the new accounting oversight board named an assistant U.S. attorney in the eastern district of Virginia as its first director of investigations and enforcement. Claudius B. Modesti, who was previously an attorney in the fraud section of the U.S. Department of Justice, has participated in the investigation and prosecution of white collar crimes and securities fraud, and was involved in several high-profile cases involving AOL, PurchasePro and others. He was also a branch chief in the enforcement division of the SEC.

Modesti will lead an inspections division that has already begun "limited inspection procedures" at the Big Four firms, and ultimately will conduct inspections of more than 200 firms per year, according to PCAOB chairman William McDonough. Inspections will occur every year for firms with more than 100 audit clients; all other firms will be inspected once every three years. The Board has already opened regional offices in New York, San Francisco, Dallas and Atlanta to facilitate those inspections.