PCAOB Staff Update on 2025 Inspections of Public Company Audits Shows Continued Audit Quality Improvement

Today, the Public Company Accounting Oversight Board (PCAOB) released a new staff Spotlight publication, “Staff Update on 2025 Inspections of Public Company Audits.” 

In 2025, the staff of the PCAOB’s Division of Registration and Inspections inspected 143 PCAOB-registered public accounting firms and reviewed portions of 780 public company audits.

Staff observed continued improvement in audit quality across a broad range of inspected firms. Part I.A deficiency rates declined across several firm categories, and deficiencies decreased in several audit areas that historically generated significant inspection findings. (A Part I.A deficiency means the audit firm failed to obtain sufficient appropriate evidence to support its opinion on the financial statements.)

“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,” said PCAOB Chairman Demetrios (Jim) Logothetis. 

Key Findings: Deficiency Rates by Audit Firm Category

• Overall: For all inspected firms, the aggregate Part I.A deficiency rate decreased to 23% in 2025, down from 38% in 2024.
• U.S. Global Network Firms (GNF): The aggregate Part I.A deficiency rate for the six U.S. GNFs decreased to 13% in 2025, from 26% in 2024. U.S. GNF firms regularly provide audit reports for more than 100 issuers and must be inspected by the PCAOB annually.
• “Big Four” U.S. Firms: The aggregate Part I.A deficiency rate for the Big Four U.S. firms – which as of December 31, 2025, collectively audited approximately 80% of the market capitalization of public companies listed on U.S. exchanges – decreased to 8% in 2025, from 20% in 2024.
• U.S. Non-Affiliated Firms (NAF) Annual: Part I.A deficiency rates at the annually inspected NAF firms decreased to 18% in the aggregate in 2025, compared to 52% in 2024. U.S. NAF firms that regularly provide audit reports for more than 100 issuers must be inspected by the PCAOB annually.
• U.S. NAF Triennial: Firms in this category regularly provide audit reports for 100 or fewer issuers and thus must be inspected by the PCAOB at least triennially (i.e., not less frequently than once every three years). Aggregate Part I.A deficiency rates in this category dropped to 32% in 2025, from 53% in 2024.
• Non-U.S. Firms: The aggregate deficiency rate at Non-U.S. GNFs increased to 26% in 2025, from 24% in 2024. Non-U.S. NAF deficiency rates declined in the aggregate from 76% in 2024 to 58% in 2025.

Investors, audit committees, and other stakeholders can learn more about PCAOB inspections on the PCAOB’s Inspections page. Visit the Staff Publications page on the PCAOB website to find more perspective on the PCAOB’s activities and observations.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.