As preliminary inspection findings indicated last year, the quality of public company audits by the largest accounting firms has continued to improve. The Big Four firms especially showed marked improvement in Part I.A of Public Company Accounting Oversight Board (PCAOB) inspection reports, according to the latest inspection reports published on August 13, 2026, covering the six largest firms.
In particular, Deloitte & Touche LLP and Ernst & Young LLP each had a 5% Part I.A deficiency rate, while PricewaterhouseCoopers LLP had a 9% rate and KPMG LLP had a 13% rate.
Overall, the Big Four’s combined Part I.A deficiency rate was 8% in 2025, down from 20% in 2024 and 26% in 2023 – a substantial improvement.
The other two firms, BDO USA, P.C. and Grant Thornton LLP, had deficiency rates of 34% and 33%, respectively.
The results are for 2025 audit inspections. It is important to note that the PCAOB doesn’t inspect all audits but scrutinizes audits that were selected largely based on risk assessment. Some audits reviewed are randomly selected.
Part I.A of the inspection report identifies deficiencies where the auditor did not obtain sufficient and appropriate audit evidence to support its opinion on the company’s financial statements and internal control over financial reporting (ICFR).
The PCAOB in 2025 reviewed 64 audits at each Big Four firm. The Big Four collectively audit about 80% of the total market cap of U.S. public companies, and thus receive more scrutiny. The board inspected 29 BDO audits and 27 GT audits in 2025.
Deloitte
Deloitte’s inspection results over the last three years show steady improvements, culminating in the 5% deficiency rate for 2025. In 2024, inspectors reviewed 63 audits and found deficiencies in nine, or a 14% deficiency rate. In 2023, inspectors reviewed 56 audits and identified deficiencies in 12 or 21%.
Last year, the PCAOB selected five audit areas most frequently for review because they were generally significant to the issuer’s financial statements. Of the five, revenue and related accounts topped the most frequently reviewed list with 51 audits. Of those, the PCAOB found deficiencies in three.
While its deficiency rate was 5% in 2025, this is not the lowest. In 2020, the PCAOB found two audit work deficiencies out of 53 audits reviewed, or 4%.
“At Deloitte & Touche LLP, we are proud of our consistently strong quality record, built on a foundation of continuous improvement, ethics, integrity and a steadfast commitment to independence to strengthen trust and confidence in the capital markets,” the firm said in an emailed statement. “We elevate audit quality through a human-led, AI-powered approach that enhances our professionals’ experience and judgment through technology-enabled precision and scalability.”
EY
While both Deloitte and EY had a 5% deficiency rate, the three-year inspection results for EY show more significant improvement for 2025 when its rate plummeted to 5% from 28% in 2024 and 37% in 2023. The number of audits reviewed was 64 in 2024 and 59 in 2023.
Revenue and related accounts were the audit area most frequently reviewed, though the number was 42. Of those, inspectors found only one deficiency. Inventory was the second most reviewed area, with 20 audits and no deficiency identified.
EY, in an email, said that the 5% findings rate was the best the firm has ever had and is a “direct result” of a $1 billion investment in technology and talent to improve audit quality.
“Trust fuels capital markets and high-quality audits play an essential role in building that trust,” Joe Link, EY Americas Assurance Vice Chair, said in an emailed statement. “Our historic results in the 2025 PCAOB inspection report validate the investments we’ve made in technology, data analytics, streamlined methodologies and our people to strengthen trust in financial reporting.”
KPMG
Of the Big Four firms, KPMG is the only one still showing a double-digit deficiency rate, with 13% in 2025. Nevertheless, the firm has shown steady improvements: 20% in 2024, with 13 audits identified as deficient out of 64 reviewed, and 26% in 2023, with 15 audits found deficient out of 58 audits reviewed.
Revenue was also the most frequently reviewed area. Of 43 audits reviewed, the PCAOB found one deficiency. Inventory was the second most frequently reviewed area; of 20 audits reviewed, inspectors found two deficiencies.
PwC
The three-year inspection results for PwC show a significant improvement in 2025 compared to the prior two years. In 2025, inspectors identified deficiencies in six audits out of 64 reviewed, for a 9% deficiency rate. In 2024, it was 16%, with 10 identified deficiencies out of 64 audits reviewed. In 2023, it was 18%, also with 10 identified deficiencies out of 57 audits reviewed.
Likewise, revenue was the most frequently reviewed audit area. Of 49 reviewed, inspectors identified deficiencies in three. Business combinations was the second most frequently reviewed audit area. Of 15 reviewed, the PCAOB found a deficiency in one.
BDO
BDO had the highest Part I.A deficiency rate among the six firms, though its 2025 inspection results still showed a sharp improvement from the prior two years. The PCAOB inspected 29 BDO audits in 2025 and identified deficiencies in 10, for a 34% deficiency rate. In 2024, inspectors found I.A deficiencies in 18 of 30 audits reviewed, or 60%. In 2023, the rate was 86%, with deficiencies in 25 of 29 audits reviewed.
Revenue and related accounts were the audit area most frequently reviewed in 2025. Of 21 audits reviewed in that area, the PCAOB found deficiencies in four. Goodwill and intangible assets, and long-lived assets, were also among the more frequently reviewed areas. Inspectors identified deficiencies in two audits in each category.
The most common Part I.A deficiencies for BDO related to testing an estimate and testing data or reports used in substantive testing.
BDO, in its response included in the report, said it had evaluated the matters described by the PCAOB and had taken appropriate actions in accordance with PCAOB standards.
Grant Thornton
Grant Thornton also continued to have a deficiency rate above 30%, though like BDO its results also improved from the prior two years. The PCAOB reviewed 27 GT audits in 2025 and identified Part I.A deficiencies in nine, for a 33% deficiency rate. That compares with 48% in 2024, when 13 of 27 audits reviewed had deficiencies, and 54% in 2023, when 15 of 28 audits reviewed had deficiencies.
Revenue and related accounts were again the audit area most frequently reviewed and had the most Part I.A deficiencies. Inspectors reviewed 21 audits in that area and found deficiencies in four. The PCAOB also identified two deficiencies each in business combinations and inventory.
The most common Part I.A deficiencies for Grant Thornton related to testing data or reports used in substantive testing and testing an estimate.
Grant Thornton, in its response included in the report, said it had carefully considered each matter identified in Part I of the draft report and had taken all steps necessary to fulfill its responsibilities under PCAOB standards.
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