Accounting firms are doing a better job of auditing public companies than in previous years, according to the Public Company Accounting Oversight Board’s (PCAOB) 2025 inspection results.
The overall estimated Part I.A deficiency rate was 23% in 2025, compared with 38% in 2024 and 46% in 2023.
Part I.A deficiencies are matters in which the PCAOB concludes that an audit firm had not obtained sufficient appropriate audit evidence to support its opinion on a company’s financial statements or internal control over financial reporting (ICFR).
The PCAOB inspected 143 firms and reviewed portions of 780 company audits in 2025.
The 2025 figures are estimates because some inspections have not been finalized and related inspection reports have not yet been published. The PCAOB also said results for prior years can change as additional reports are released.
The deficiency rate for the Big Four firms – Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP, and PricewaterhouseCoopers LLP – declined to 8% in 2025 from 20% in 2024 and 26% in 2023.
Individual estimated 2025 rates for the Big Four were 5% for Deloitte, 5% for EY, 13% for KPMG, and 9% for PwC. The four firms collectively audited about 80% of the market capitalization of public companies listed on U.S. exchanges as of December 31, 2025.
For all global network firms – the Big Four, BDO USA, and Grant Thornton – the deficiency rate declined to 13% from 26% in 2024 and 34% in 2023.
The rate for non-affiliated firms inspected annually was estimated at 18% in 2025, compared with 52% in 2024 and 53% in 2023. For U.S. non-affiliated firms inspected on a triennial basis, the rate fell to 32%, from 53% in 2024 and 65% in 2023.
“The overall decline in Part I.A deficiency rates suggests that measures undertaken by many firms in recent years continue to build momentum and drive an ongoing positive effect on consistent audit execution in accordance with the PCAOB standards,” according to the staff report summarizing 2025 inspections, published on October 22, 2026.
The report noted that the staff has not studied why the deficiency rate has declined, but the staff report for the 2024 inspections highlighted potential drivers of improvement, such as more in-office work, more focused training, additional resources, and improved supervision and review.
“These drivers continued to impact audit quality in the 2025 inspection cycle,” the report said. “We observed sustained focus on quality control, accountability, and use of technology, among other factors, which seemed to contribute to the continued improvement reflected in the 2025 inspection results.”
In the meantime, results for firms outside the U.S. were mixed.
The estimated deficiency rate for non-U.S. global network firms was 26% in 2025, compared with 24% in 2024. The PCAOB said changes in the mix of firms and audits reviewed, including inspections of firms for the first time, may affect annual aggregate results for non-U.S. firms.
“Modernizing PCAOB’s inspections process is critical to fulfilling our mission as super intelligence and the digital age continue to reshape the auditing profession at an unprecedented pace,” PCAOB Chairman Demetrios Logothetis said in a statement.
“First and foremost, we are working to identify the factors that produced these results in order to better understand both the drivers of improving audit quality and the root causes of audit deficiencies,” he added. “This will enable the PCAOB to deliver more meaningful insights that support high-quality audits and investor protection.”
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