Washington (June 25, 2004) -- The Public Company Accounting Oversight Board identified "significant audit and accounting issues" in its preliminary inspections of the four largest U.S. accounting firms, PCAOB Chairman William McDonough told congressional leaders this week.

"As one would expect of sophisticated organizations, each of the firms has developed multiple volumes of quality-control policies, but individual engagements are the litmus test for whether the firms are in fact conducting high-quality audits," McDonough testified before a House Financial Services subcommittee Thursday. "Although we only reviewed a small number of engagements in 2003, we identified significant audit and accounting issues."

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