Audit quality across public company audits continued to improve in 2025, according to a new report from the Public Company Accounting Oversight Board (PCAOB).
The findings were published in a staff Spotlight publication titled “Staff Update on 2025 Inspections of Public Company Audits.”
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During the year, staff from the PCAOB’s Division of Registration and Inspections examined sections of 780 public company audits and inspected 143 registered public accounting firms.
Inspectors observed lower Part I.A deficiency rates across multiple firm categories, as well as reductions in several audit areas that have historically generated elevated inspection findings.
Across all reviewed firms, the aggregate Part I.A deficiency rate declined to 23% in 2025, down from 38% in 2024.
The Big Four US firms saw their aggregate Part I.A deficiency rate fall to 8% in 2025 from 20% in 2024.
As of 31 December 2025, these four firms audited approximately 80% of the market capitalisation of US-listed public companies.
For the six US global network firms, which regularly audit more than 100 issuers and undergo annual reviews, the aggregate deficiency rate halved to 13% from 26% in 2024.
US non-affiliated firms also registered lower deficiency levels. Annually inspected domestic non-affiliated firms, which issue audit reports for over 100 issuers, recorded an aggregate rate of 18% in 2025, down from 52% in 2024.
For US non-affiliated firms auditing 100 or fewer issuers – which are inspected at least once every three years – aggregate deficiency rates fell to 32% from 53%.
Performance among non-US firms was mixed. The aggregate deficiency rate for non-US global network firms rose to 26% in 2025 from 24% in 2024, while the rate for non-US non-affiliated firms dropped to 58% from 76%.
PCAOB chairman Demetrios Logothetis said: “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.”
