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<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>3
<FILENAME>pfolettr.txt
<TEXT>
Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Flaherty and Crumrine Preferred Income Opportunity Fund
Incorporated
In planning and performing our audits of the financial
statements of Flaherty and Crumrine Preferred Income
Opportunity Fund Incorporated, for the year ended November
30 2004, 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.
The management of Flaherty and Crumrine 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.
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.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be
material weaknesses under the standards of the Public
Company Accounting Oversight Board (United States).  A
material weakness is a significant deficiency, or
combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement
of the annual or interim financial statements will not be
prevented or detected.  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,
2004.
This report is intended solely for the information and use
of management and the Board of Directors of Flaherty and
Crumrine 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.

Boston, Massachusetts
January 21, 2005


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