KPMG tops UK Big Four in FRC’s 2026 audit quality inspections
Financial Reporting Council finds 95% of KPMG UK audits inspected required no more than limited improvements, ahead of Deloitte, EY and PwC
KPMG recorded the strongest inspection result among the UK Big Four in the Financial Reporting Council’s 2026 Annual Review of Audit Quality.
The regulator inspected 20 KPMG audits and assessed 19, or 95%, as requiring no more than limited improvements. Deloitte and EY each achieved 90%, while PwC recorded 89%. None of the Big Four audits inspected required significant improvement.
The result marks a substantial turnaround for KPMG, which five years ago was facing widespread criticism of its audit work and several major regulatory investigations. The FRC described the firm’s system of quality management as mature and well established, highlighting robust risk-assessment processes, strong governance and sustained improvements in audit quality.
The regulator nevertheless identified the auditing of impairments to non-current assets as an area requiring further improvement. A separate set of inspections conducted by the ICAEW produced a weaker outcome for KPMG’s non-public-interest-entity audits, with 63% assessed as good or generally acceptable, down from 100% in the previous year.
Across the wider market, the FRC inspected 116 audits. Seventy-nine per cent were rated good or as requiring only limited improvements, unchanged from the previous year, while three required significant improvements, compared with ten a year earlier.
The gap between the Big Four and their principal challengers remained pronounced. Forvis Mazars recorded 70%, while only half of the BDO audits inspected achieved a positive outcome. The regulator said recurring findings at BDO remained unacceptable.
The FRC cautions that its inspections use relatively small, risk-based samples. The annual percentages therefore provide an important indicator of performance but should not be treated as a complete assessment of every audit conducted by a firm.
Related coverage
KPMG comes top in annual review of audit industry performance — The Times, 22 July 2026
Reports that KPMG led the Big Four inspection results for the first time and examines the firm’s turnaround from its audit-quality and enforcement problems earlier in the decade.
FRC Annual Review of Audit Quality equips investors and audit committees to make better decisions — Financial Reporting Council, 22 July 2026
The regulator’s official announcement explains the purpose of the review and its increased focus on firms’ systems of quality management, governance and operating models.
FRC publishes Annual Review of Audit Quality 2026 — LexisNexis, 22 July 2026
Provides a concise overview of the market-wide findings, the continuing improvement among the largest firms and the FRC’s revised risk-based supervisory approach.
For deep dives on regulatory news check out the Big4News Case Watch Series
Case Watch
Big4News Case Watch tracks significant regulatory investigations, enforcement actions and litigation involving the Big Four firms, with a focus on matters that shed light on their internal cultures, governance, accountability mechanisms, and how they respond when serious allegations or audit failures surface.
Want to stay up to date on all things Big Four around the world?
Check out the News section and subscribe to Big4News for weekly deep dives and briefings.