Audit deficiency rates decreased last year

• Key Insight: Learn how audit deficiency rates shifted across global and domestic accounting firms.
• What’s at Stake: Investors and public companies relying on the integrity of major global audit firms.
• Supporting Data: 143 registered firms and 780 public company audits reviewed for the regulator’s report.

Audit deficiency rates decreased to 23% last year, down 15 points from 38% in 2024, according to a new report. 

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The Public Company Accounting Oversight Board saw an improvement in audit quality in its latest spotlight report. Part I.A deficiency rates — when an audit firm failed to obtain sufficient appropriate evidence to support its opinion —  decreased in several firm categories, and deficiencies decreased in several areas that have historically generated significant inspection findings. 

Part I.A deficiency rates for the six U.S. global network firms decreased 13 points year over year, from 26% in 2024 to 13% in 2025. U.S. GNFs regularly provide audits for over 100 issuers and are inspected annually by the PCAOB.

Deficiency rates for the Big Four Firms decreased 12 points, from 20% in 2024 to 8% in 2025. As of Dec. 31, 2025, the Big Four collectively audited 80% of the market capitalization of public companies listed on the U.S. exchanges. 

For U.S. non-affiliated firms (annual), deficiency rates dropped 34 points, from 52% in 2024 to 18% in the aggregate in 2025. U.S. NAFs that provide audits for more than 100 issuers are inspected by the PCAOB annually.

Deficiencies for NAFs (triennial), meaning firms in this category that provide audits for 100 or fewer issuers and thus are inspected by the PCAOB once every three years, fell 21 points, from 53% in 2024 to 32% in 2025. 

Finally, deficiency rates inched up 2 points at non-U.S. GNFs, from 24% in 2024 to 26% in 2025, while deficiencies at non-U.S. NAFs decreased 18 points in the aggregate, from 76% in 2024 to 58% in 2025.

“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. 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. This will enable the PCAOB to deliver more meaningful insights that support high-quality audits and investor protection,” PCAOB chairman Demetrios Logothetis said in a statement. 

The PCAOB inspected 143 registered accounting firms and reviewed portions of 780 public company audits for this report.

Introductory bullet points created by AI with editorial review.