EY Audit Deficiency Rates Dropped to 5 Percent

The firm attributed the sharp decline in inspection failures to a $1 billion investment in audit technology.

Updated on Sept. 24, 2026 in Artificial Intelligence

Isometric editorial illustration of a polished steel caliper on a translucent glass block, representing precision and audit quality. — Ernst & Young saw its audit deficiency rate drop to 5% in 2025 following a $1 billion investment in audit technology and AI verification tools. AI Illustration. Upload story photo >

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Ernst & Young reported a decline in its audit deficiency rate to 5% in 2025, down from 28% in 2024, according to its 2026 U.S. audit quality report. The findings reflect the results of 64 audits reviewed by the Public Company Accounting Oversight Board in both years.

Why it matters

The shift highlights how large-scale investments in technology and operational restructuring can measurably impact quality metrics in high-stakes financial services. The firm credits this improvement to a multiyear transformation strategy.

The firm completed 69% of audit hours before year-end as part of a $1 billion technology and talent investment. These efforts integrated agentic AI—autonomous software capable of executing tasks without constant human intervention—into the EY Canvas platform.

The players

Ernst & Young

A global professional services firm providing audit, tax, and consulting services with a focus on integrating AI into accounting workflows.

Public Company Accounting Oversight Board

A non-profit corporation established by Congress to oversee the audits of public companies in order to protect investors.

The details

The firm utilized agentic AI tools within its EY Canvas audit platform to automate data-heavy verification processes. By shifting 69% of audit labor to be completed before the close of the fiscal year, the firm aimed to reduce the intensity of year-end reporting rushes. The firm expects these AI systems to achieve support for end-to-end audit activities by 2028.

2024: The PCAOB reviewed 64 EY audits, identifying a 28% deficiency rate.
2025: The PCAOB reviewed 64 EY audits, identifying a 5% deficiency rate.
September 24, 2026: Ernst & Young released its 2026 U.S. audit quality report.
2028: Agentic AI is expected to support end-to-end audit activities.

The Tech Race

This performance improvement serves as an internal benchmark following the firm's 2024 audit inspection. It marks a shift as the firm attempts to scale agentic AI capabilities ahead of competitors.

Public companies and their stakeholders should expect a shift toward more consistent, year-round audit cycles as firms automate data collection. The firm plans for full end-to-end agentic AI integration in audit tasks by 2028.

The takeaway

The firm aims to sustain its 5% deficiency rate in future inspection cycles through continued AI deployment. Investors and regulators should monitor the 2027 inspection outcomes to see if these gains remain stable as the firm expands its use of agentic tools.