[US] Big Four Audit Quality Scores Rise as Watchdog Weighs Revamp

Aug. 14, 2026

The Big Four firms and other top auditors saw their US inspection results improve sharply last year under a supervision program poised for a shakeup from the industry regulator.

Deficiency rates fell to 12.5% in 2025 across the top firms, including Deloitte, EY, KPMG, and PwC, despite lagging scores for BDO and Grant Thornton, according to results the Public Company Accounting Oversight Board released Thursday. The rate was twice as high in 2024.

Inspections serve as the PCAOB’s primary supervision tool by assessing how well auditors vet corporate accounting and financial reporting controls. The latest results reflect inspections conducted in 2025 that largely focused on work related to 2024 financial statement audits.

PCAOB Chair Demetrios Logothetis, who joined the board in February, has pledged to redesign the inspections process to focus primarily on internal firm safeguards. The revamped report card would look at how well such precautions offset audit risks and ensure auditors meet core requirements. Inspections currently evaluate such guardrails, known as quality controls, but the board only discloses problems if firms haven’t resolved deficiencies after a year.

Investor advocates have warned that the proposed inspection changes could leave investors with less information about the quality of audits because fewer could be subjected to board scrutiny.

Inspectors continued checking the work of audit firms hired to vet the corporate accounting of US-listed stocks last year despite a Republican-led push in Congress to dismantle the Enron-era regulator and a leadership shuffle. Board member George Botic stepped in to temporarily steer the regulator after former Chair Erica Williams was forced out last summer by the Trump administration.

The board’s findings “demonstrate the important role inspections can play in driving improvements in audit quality,” Logothetis said in a statement. The board said no single factor contributed to the stronger quality results.

Results for other annually inspected firms would be released as they are completed, the PCAOB said.

EY Rising

Ernst & Young LLP posted its best results since 2009, tying with Deloitte & Touche LLP for the lowest violation rate — 5% of EY audits missed the mark compared with more than a quarter found deficient the previous year. The firm’s results have steadily improved since 2022, when inspectors found problems with nearly half of EY’s audits.

Investments the firm has made in technology and standardizing its audit methods are paying off, EY said in a statement. AI-backed tools, advanced analytics, and stronger governance allow front-line auditors to “spend more time on areas that require deeper insight and judgment to safeguard trust,” Richard Jackson, assurance chief technology officer for EY Americas, said in the statement.

Inspectors cited EY for its work vetting insurance-related asset disclosures and income taxes, while Deloitte fell short testing revenue for three of its 64 audits inspected last year, or 5%. Deloitte firm had a 14% violation rate previously.

Less than 10% of PwC’s inspected audits missed the mark, down from 16% the prior year, according to its results. “We continue to take meaningful actions to stay on the leading edge of audit quality,” the firm, also known as PricewaterhouseCoopers, said in a statement.

KPMG LLP bolstered its compliance for the third consecutive year, with deficiencies found in just 13% of its inspected audits. The firm achieved a milestone 20% deficiency rate in 2024, its best result in more than a decade.

Mid-tier firms BDO USA PC and Grant Thornton LLP, however, continued to lag behind the larger firms, with inspectors faulting roughly one-third of their audits picked for review.

Still, BDO cut its violation rate by nearly half to 34% as it continues to advance reforms meant to sharpen its audit work. The board faulted 33% of Grant Thornton’s inspected audits, versus 48% previously.

Private equity-backed Grant Thornton could significantly grow its portfolio of public company audit clients with its planned acquisition of CBIZ Inc. Through an earlier merger, CBIZ serves a larger slice of the market for public company audits than BDO.

Grant Thornton declined to comment on how such an expansion could alter its momentum to bolster its audits. Innovations like the firm’s AI-backed audit platform and policy changes like better project management and more frequent consultations with national office staff strengthen its audits, the firm said.

BDO, Deloitte, and KPMG didn’t respond to requests for comment.

[Bloomberg Tax]