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Ernst & Young had a much improved result in its latest PCAOB inspection. According to the report, EY’s Part I. A. audit deficiency rate declined from 28% in 2024 to 5% in 2025. This excerpt from a CFO Dive article says that the firm believes its investments in technology, including AI tools, had a lot to do with the improved results:

For EY, the turnaround was the “direct result” of a $1 billion investment in technology and talent to “increase audit quality, including expanded use of AI and advanced analytics, continuous learning, and shifting work so teams focus on the areas requiring the highest levels of judgment and insight,” the firm said in an emailed statement.

The technology changes focused heavily on standardizing and simplifying the audit process globally, [EY Americas CTO Richard] Jackson said.

EY also worked to eliminate unnecessary audit steps and concentrate more closely on procedures tied to key risks, while investing in employee training and compensation.

Interestingly, the article says that the inspection results don’t reflect additional investments in generative and agentic AI tools that the firm introduced this year.

It’s also worth noting that the inspection report showed significant drops in the deficiency rates among the other Big Four firms. KPMG’s deficiency rate dropped from 20% to 13%, PwC’s dropped from 16% to 9%, and Deloitte’s dropped from 14% to 9%. The article doesn’t mention the extent to which tech and AI investments played a role in the other firms’ improved results, but it’s hard to imagine they didn’t.

– John Jenkins