As you likely know, the Public Company Accounting Oversight Board will be conducting inspections of the Big Four and other accounting firms on a regular basis.

However, if your company's audit becomes the subject of a PCAOB inspection, you won't find out from the Board.

Sayther

That's according to Colleen Sayther, president and CEO of Financial Executives International, whose committee on corporate reporting recently met with PCAOB staff.

As a result, Sayther noted in a letter to FEI members that the Board suggested, "It would be prudent for a company to, in a contractual relationship with their auditor, request such notice," should an inspection occur.

That can get accomplished in an audit engagement letter.

At the same time, Sayther warned that the PCAOB would likely have direct contact with issuers' audit committee chairs "to discuss the relationship and communications with the auditor," as well as the audit process.

That information is in line with a June 8, 2004 article in Compliance Week, which noted that in 2003, the PCAOB made a point of calling the chairman of company audit committees to determine whether communications between the audit firm and the audit chairman complied with existing requirements.

George Diacont, director of registration and inspections for the PCAOB, told Compliance Week that this year's questions to audit committee chairman chairmen would include independence issues, such as the sale of non-audit services, pre-approval of non-audit service and contingent and value added fee arrangements.

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