The International Forum of Independent Audit Regulators (IFIAR) released a report on April 1, 2026, detailing the results of its 2025 Annual Survey of Inspection Findings, which showed an increase in the proportion of inspected audits with at least one finding.
According to the report, 35% of audit engagements inspected in 2025 had at least one finding, compared with 34% in the 2024 survey. The IFIAR reported that the percentage of audits with findings had declined from 47% in 2014, when the organization began tracking the data, to 26% in 2022, but then rose each year to reach 35% in 2025. The three-year rolling average also increased, from 30% to 33%.
“The recurrence and level of findings reflected in the survey continues to raise concerns among IFIAR members regarding the consistency of audit quality and the need for sustained improvement,” the global panel of audit regulators said in the report.
The survey collected results from inspections conducted by IFIAR member regulators, including the U.S. Public Company Accounting Oversight Board, in 52 jurisdictions. Those inspections covered audit firms affiliated with the six largest global audit firm networks, known collectively as the Global Public Policy Committee (GPPC) networks: BDO International Limited, Deloitte Touche Tohmatsu Limited, Ernst & Young Global Limited, Grant Thornton International Limited, KPMG International Cooperative, and PricewaterhouseCoopers International Limited.
The survey includes findings from inspections of both firm-wide systems of quality management and individual audit engagements involving listed public interest entities (PIEs), including systemically important financial institutions (SIFIs). Inspection findings for PIE audits are defined in the report as deficiencies in audit procedures that indicate the audit firm did not obtain sufficient appropriate audit evidence to support its opinion. The report notes that such findings “do not necessarily indicate that the audited financial statements are misstated.”
In its overview of the 2025 results, the IFIAR reported that 836 listed PIE audits were inspected during the survey period, with 292 of those audits having at least one finding. The average number of findings per inspected PIE audit with findings was 3.3, compared with 3.2 in 2024. Approximately 91% of inspections reported in the 2025 survey pertained to audits with financial year-ends in 2023 or 2024.
The report identified several audit inspection themes with higher frequencies of findings in 2025. For listed PIE audits, the areas with the highest percentages of inspections containing findings included accounting estimates, including fair value measurement, internal control testing, audit committee communications, audit sampling, and inventory procedures. The IFIAR reported that four of the five inspection areas with the highest frequency of findings in 2025 continued to show elevated levels relative to prior surveys.
Inspection results related to firm-wide systems of quality management also showed an increase in findings. Forty-four IFIAR members reported the results of inspections of 161 audit firms’ quality management systems in 2025. The most frequently cited inspection themes included engagement performance, monitoring and remediation processes, relevant ethical requirements, human resources, and engagement quality reviews under International Standard on Quality Management 2 (ISQM 2) as set by the International Auditing and Assurance Standards Board.
The 2025 survey reflects the continued transition from International Standard on Quality Control 1 to ISQM 1. The IFIAR reported that 48 of the 52 participating jurisdictions require adoption of ISQM 1, and that inspections increasingly focus on quality management systems conforming to that standard.
IFIAR noted that year-over-year changes in aggregate survey results are not necessarily indicative of lasting changes in audit quality. The report states that inspection programs are risk-based and do not select representative samples of all firms or audits in a jurisdiction. It also highlights the time lag between the completion of an audit, the performance of an inspection, and the issuance of a final inspection report, which may delay the reflection of remediation efforts in survey results.
In the report, the IFIAR urged audit firm networks and their member firms to continue identifying factors underlying inspection findings and to implement remedial measures. IFIAR stated that responsibility for improving audit quality rests with audit firms, while the organization seeks to promote consistent, high-quality audits globally through regulatory collaboration, oversight development, and engagement with audit networks.
As part of its ongoing audit quality initiatives, the IFIAR’s Global Audit Quality Working Group is engaged in a multi-year effort with GPPC networks to reduce the percentage of inspected listed PIE audits with findings from 32% in 2023 to 24% by the end of 2027.
The report notes that past initiatives were based on the findings of a subset of members whereas the current initiative includes all members participating in the survey.
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