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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000940400-02-000062.txt : 20020414
<SEC-HEADER>0000940400-02-000062.hdr.sgml : 20020414
ACCESSION NUMBER:		0000940400-02-000062
CONFORMED SUBMISSION TYPE:	NSAR-B
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20011130
FILED AS OF DATE:		20020129

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PREFERRED INCOME OPPORTUNITY FUND INC
		CENTRAL INDEX KEY:			0000882071
		IRS NUMBER:				954355600
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		NSAR-B
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-06495
		FILM NUMBER:		02520047

	BUSINESS ADDRESS:	
		STREET 1:		301 E COLORADO BLVD STE 720
		STREET 2:		C/O FLAHERTY & CRUMRINE INC
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101
		BUSINESS PHONE:		8187957300

	MAIL ADDRESS:	
		STREET 1:		301 COLORADO BLVD
		STREET 2:		STE 720
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101
</SEC-HEADER>
<DOCUMENT>
<TYPE>NSAR-B
<SEQUENCE>1
<FILENAME>answer.fil
<TEXT>
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SIGNATURE   KEVIN CONNERTY
TITLE       ASSISTANT TREASURER


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>pwcop.htm
<TEXT>
<HTML>
<HEAD>

<TITLE>January 14, 2002</TITLE>
</HEAD>
<BODY>

<P>January 14, 2002</P>

<P>Securities and Exchange Commission</P>
<P>40 Fifth Street, N.W.</P>
<P>Washington, D.C.  20549</P>

<P>Ladies and Gentlemen:</P>

<B><P ALIGN="CENTER">Preferred Income Opportunity Fund Incorporated</P>
<P ALIGN="CENTER"></P>
</B><P>We have read the letter (copy attached) dated January 8, 2002 from Robert T. Flaherty, Chairman of the Board of Preferred Income Opportunity Fund Incorporated, which we understand will be filed in response to Sub-Item 77-K of Form N-SAR and are in agreement with the statements concerning our firm contained therein.</P>

<P>Yours very truly,</P>

<FONT SIZE=2><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P></FONT></BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77K CHNG ACCNT
<SEQUENCE>4
<FILENAME>changepfo.htm
<TEXT>
<HTML>
<HEAD>

<TITLE>Change in Independent Auditors</TITLE>
</HEAD>
<BODY>

<FONT FACE="Times,Times New Roman"><P>Change in Independent Auditors</P>

<P>Based on the recommendation of the Audit Committee of the Fund, the Board of Directors voted to appoint KPMG LLP as the Fund's independent auditors for the Fund's fiscal year ended November 30, 2001. On October 17, 2001, PricewaterhouseCoopers LLP (&quot;PwC&quot;) resigned as the independent auditors of the Fund.</P>

<P>The reports of PwC on the Fund's financial statements for fiscal years ended in 2000 and 1999 did not contain an adverse opinion or a disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles.</P>

<P>During the Fund's fiscal years ended in 2000 and 1999, and through October 17, 2001, there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PwC, would have caused them to make reference to the subject matter of the disagreement in their report on the financial statements for such years.</P>
</FONT></BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>fcpfo.htm
<TEXT>
<HTML>
<HEAD>

<TITLE>January 8, 2002</TITLE>
</HEAD>
<BODY>

<P>January 8, 2002</P>

<P>Ms. Christine Lennon, Partner</P>
<P>PricewaterhouseCoopers LLP</P>
<P>160 Federal Street</P>
<P>Boston, Massachusetts  02110</P>

<P>&nbsp;</P>
<P>Dear Ms. Lennon:</P>

<P>On October 17, 2001, PricewaterhouseCoopers LLP resigned as the independent accountants of Preferred Income Opportunity Fund Incorporated (Commission File Number 811-06495).</P>

<P>In accordance with the requirements of item 304 of Regulation S-K, please provide us with a letter from your firm addressed to the Securities and Exchange Commission stating your agreement with the following:</P>

<OL>

<LI>Effective October 17, 2001, PricewaterhouseCoopers LLP resigned as the independent accountants of Preferred Income Fund Incorporated. </LI>

<LI>PricewaterhouseCoopers LLP's reports on the funds' financial statements for fiscal years ended in 2000 and 1999 did not contain an adverse opinion or a disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles.</LI>

<LI>During the funds' fiscal years ended in 2000 and 1999, and through October 17, 2001, there were no disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused it to make reference to the subject matter of the disagreement in its report on the financial statements for such years.</LI></OL>


<P>A copy of your letter will be filed with the Securities and Exchange Commission along with this letter as an exhibit to the fund's next Form N-SAR (in accordance with Sub-Item 102J of Form N-SAR). </P>

<P>Sincerely,</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<FONT FACE="Times,Times New Roman"><P>Robert T. Flaherty</P>
<P>Chairman of the Board</FONT><BR>
Preferred Income Opportunity Fund Incorporated</P>
<FONT SIZE=2></FONT></BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>6
<FILENAME>kpmgpfo.htm
<TEXT>
<HTML>
<HEAD>

<TITLE>The Board of Trustees and Shareholders </TITLE>
</HEAD>
<BODY>

<FONT SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">The Board of Directors and Shareholders</P>
<P ALIGN="JUSTIFY">Preferred Income Opportunity Fund Incorporated</P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY">In planning and performing our audit of the financial statements of Preferred Income Opportunity Fund Incorporated for the year ended November 30, 2001, we considered its internal control, including control activities for safeguarding securities, in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-SAR, not to provide assurance on internal control.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The management of Preferred Income Opportunity Fund Incorporated is responsible for establishing and maintaining internal control.  In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls.  Generally, controls that are relevant to an audit pertain to the entity's objective of preparing financial statements for external purposes that are fairly presented in conformity with accounting principles generally accepted in the United States of America.  Those controls include the safeguarding of assets against unauthorized acquisition, use, or disposition. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Because of inherent limitations in internal control, error or fraud may occur and not be detected.  Also, projection of any evaluation of internal control to future periods is subject to the risk that it may become inadequate because of changes in conditions or that the effectiveness of the design and operation may deteriorate.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants.  A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.  However, we noted no matters involving internal control and its operation, including controls for safeguarding securities, which we consider to be material weaknesses as defined above as of November 30, 2001.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">This report is intended solely for the information and use of management and the Board of Directors of Preferred Income Opportunity Fund Incorporated and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties.</P>
<P ALIGN="JUSTIFY">/s/ KPMG LLP </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Boston, Massachusetts</P>
<P ALIGN="JUSTIFY">January 7, 2002</P></FONT></BODY>
</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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