Ernst & Young Audit Deficiency Rates Dropped Sharply

The firm reported a significant decline in inspection findings following a $1 billion investment in technology and talent.

Updated on Sept. 24, 2026 in Artificial Intelligence

Ernst & Young Audit Deficiency Rates Dropped Sharply

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Ernst & Young has seen its audit deficiency rate fall to 5% in 2025, down significantly from 28% in 2024 according to data from the Public Company Accounting Oversight Board. The improvement follows the firm's $1 billion investment in new technology and personnel.

Why it matters

The shift highlights how large-scale investments in artificial intelligence and workforce training can directly impact the accuracy and regulatory compliance of corporate financial reporting. By front-loading audit hours, the firm aims to maintain these higher standards in future reporting cycles.

Ernst & Young integrated agentic AI tools into its EY Canvas platform, which now supports 100% of its U.S. professionals. Additionally, 69% of public company audit hours are currently completed before year-end.

The players

Ernst & Young

This is a global professional services firm that provides audit, tax, and consulting services to public and private companies.

Public Company Accounting Oversight Board

This is a private-sector, nonprofit corporation created by the Sarbanes-Oxley Act of 2002 to oversee the auditors of public companies.

The details

Ernst & Young attributes the performance gains to a multiyear transformation strategy centered on its $1 billion technology and talent investment. The firm has successfully shifted its operational workflow, allowing for the majority of audit work to be finalized before the close of the calendar year.

In 2024, the PCAOB reviewed 64 EY audits with a 28% deficiency rate.
In 2025, the PCAOB reviewed 64 EY audits with a 5% deficiency rate.
Ernst & Young released its 2026 audit quality report on September 24, 2026.
The firm expects agentic AI to support end-to-end audit activities by 2028.

The Tech Race

This move reflects a broader industry shift toward embedding agentic AI into legacy professional workflows to minimize human error. It positions the firm as a leader in automating complex accounting tasks compared to traditional manual audit processes.

For investors and clients, these results suggest increased reliability in financial statements as AI tools become standard in auditing. The adoption of these platforms streamlines the audit process, potentially leading to faster and more efficient reporting timelines.

The takeaway

Technological investment serves as a critical lever for improving compliance and efficiency within the auditing profession. Organizations that prioritize AI integration for data-heavy tasks are likely to see improved regulatory outcomes over time.