In its top to bottom review of all aspects of the auditing business, the Public Company Accounting Oversight Board (PCAOB) has turned its attention to tax shelters.

Created in the wake of corporate scandals at Enron, WorldCom and others, the PCAOB is charged with reforming the auditors who oversee publicly held companies. Most of those audit firms have until October 22 to register with the PCAOB, which will guarantee an inspection by the board.

To date, just 440 audit firms—half the number who audited public companies last year—have registered. Board inspections of the Big Four firms—Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers—are under way.

The board is now looking at tax shelters. In the definition of duties rules inflicted on auditors recently, tax advice is not one of the prohibited activities.

"This is an area in which auditors and audit committees should be cautious," Public Company Accounting Oversight Board member Daniel Goelzer said in prepared remarks reported by Reuters. "I have no problem with auditors assisting their clients with traditional tax compliance and routine planning," he said, in the remarks to be delivered to mutual fund accountants, adding that, "Tax services that go beyond that—especially the marketing to audit clients of novel, tax-driven, financial products—raise serious issues."

Since there is a fine line between tax shelters and tax planning and because the shelters are popular with businesses and profitable for audit firms, Goezler said it will be difficult to come up with rules to govern their use.

"However, given the well-publicized congressional and public concern in this area, the board may have to try its hand at solving the problem," Goelzer said.

The meeting will be webcast and open to the public. Real-time and archived audio webcasts of the Board's meetings are accessible on the PCAOB Web site.