Inspection staff at the PCAOB expect significant improvements in aggregate deficiency rates across all categories of inspected firms in 2024, as detailed in a new PCAOB staff Spotlight publication.  

This improvement follows focused efforts by the PCAOB to encourage firms to address their high deficiency rates coming out of the pandemic and improve audit quality for investors. 

Key findings: 

• Overall Part I.A deficiency rates: For all inspected firms, the aggregate Part I.A deficiency rate decreased to 39% in 2024, down from 46% in 2023. 

• Big Four U.S. Firms: The aggregate Part I.A deficiency rate for the Big Four U.S. firms – which as of December 31, 2024, collectively audit approximately 80% of the market capitalization of public companies listed on exchanges – decreased to 20% in 2024, from 26% in 2023. 

• U.S. Global Network Firms (GNF): The aggregate Part I.A deficiency rate for the six U.S. GNFs decreased to 26% in 2024, from 34% in 2023. 

• U.S. Non-Affiliated Firms (NAF): Results at the eight annually inspected NAF firms held steady, decreasing to 52% in the aggregate in 2024, compared to 53% in 2023. 

• Triennial Firms: Although the same firms are not inspected year-to-year, we saw improvements at the NAF and GNF triennially inspected firms. Aggregate deficiency rates at NAF triennially inspected firms decreased from 67% in 2023 to 61% in 2024, and GNF triennially inspected firms decreased from 35% in 2023 to 26% in 2024. 

PCAOB Chair Erica Williams has repeatedly called on firms to improve audit quality, and the PCAOB has engaged in focused efforts to encourage firms to address their high deficiency rates coming out of the pandemic.  

PCAOB initiatives detailed in today’s report include: 

• Publishing a variety of information, resources, and tools to help firms improve audit quality 

• Increasing transparency 

• Engaging regularly with firms 

• Providing focused support to smaller firms 

• Publishing implementation guidance for new PCAOB standards 

• Prioritizing guidance and communication regarding remediation submissions for quality control deficiencies 

• Engaging directly and regularly with U.S. audit committees 

• Increasing our focus on the effect of firm culture on audit quality.