Our commitment

to audit quality
Information for audit committees,
investors and other stakeholders
Ernst & Young LLP
October 2025

Enter •
Audit committees, investors
and other stakeholders:
At Ernst & Young LLP (EY US or the Firm) we are bringing our bold vision for the future of audit to life, with quality
A message from at the center.
We are continuing to transform the EY audit with our multi-year $1 billion investment1 in technology and talent. We are
already using artificial intelligence (AI) and advanced data analytics in our audits, and we are expanding our use of AI
and other cutting-edge technologies to enhance audit quality, drive efficiencies and provide better insights. We are
also providing our people with opportunities to develop the skills they need to become well-rounded business leaders.
At the same time, our continuous improvement mindset, which we call The EY Way, moves us forward as we continue
to innovate and perform work earlier in the audit, while providing a distinctive experience for our clients and our
people. We are leveraging the skills and experiences of our people and technology to perform a streamlined, risk-based
audit and provide timely sector insights. We expect our use of technology to continue to add value for our clients.
We are proud to announce that our transformation is already having a significant positive impact on our audit
practice. We expect our inspection findings rate to fall below 10%2 when the Public Company Accounting Oversight
Board (PCAOB) issues its 2025 inspection report in the coming months. That compares with a findings rate of 28% in
2024. Our 2025 inspection results are among the best we’ve ever had.
We expect to sustain our audit quality due to our ongoing investments. Our journey continues with exciting new AI tools
coming in 2026 and continued investments that will deliver an even better experience for our clients and our people.
Julie A. Dante P.
Performing high-quality audits is essential to maintaining our strong brand. The EY audit promotes confidence in
Boland D’Egidio financial reporting and, in turn, the capital markets. With audit quality, independence, accountability and integrity
US Managing Partner US Vice Chair – Assurance at our foundation, we will continue to evolve how we work and shape the future of the EY audit. We are anticipating
Ernst & Young LLP Ernst & Young LLP the needs of tomorrow and leading the way with confidence.

2 Our commitment to audit quality

 Key metrics
13,804
In a recent survey of our people,
Our PCAOB inspection findings rate has improved dramatically

50%
46%
US audit and IT professionals by rank

11%
99% 98% 40% 37%

believe they have a

personal responsibility
say they understand that
consistently performing 30%
28%
24% for delivering quality on quality audits serves the
their audits public interest

65%
20%

21%

95%
of our audit and IT
professionals are Lean Six 10%
Sigma white belt certified
Partners and Senior Seniors
managing managers and staff
directors and managers
0%
Expected

~65% <1%
of public company audit 2021 2022 2023 2024 decline
hours were incurred of issuers we audit restated in 2025
before our clients’ their financial statements
balance sheet date over our last three fiscal years Inspection year

3 Our commitment to audit quality See endnotes 3 through 8 for descriptions of how these metrics were calculated.
 Recognition in the market
#1 auditor
of companies on the Fortune 1000 list and Russell 3000 index
--------------------------------------
among the Big 4 of companies that went public over the last 10 years
--------------------------------------
in a recent US brand survey, with 88% of business leaders who responded saying
they would consider EY as an auditor

We audit six of the 10 largest companies on the Fortune 1000

4 Our commitment to audit quality See endnotes 9 through 12 for descriptions of how these metrics were calculated.
Shaping the future with confidence
Modern approach
Streamlined Delivering a clear methodology through
With audit quality as our foundation, process an integrated workflow
we’re continuing to transform the
audit, creating a better experience AI-powered Thriving AI-powered platform
platform professionals Cutting-edge technologies to identify
for our clients and people.
trends and sharpen our risk-based
approach
We’re delivering a streamlined
methodology, investing in our people Streamlined process
and integrating AI and advanced Distinctive
Modern Leveraging continuous improvement and
client
analytics to address risks and deliver approach embedding specialized teams for seamless
experience
actionable insights. end-to-end execution

Thriving professionals
The EY audit drives confidence in
Developing forward-thinking business
financial reporting and the capital Multidisciplinary Global professionals who deliver exceptional
markets. teams network client service

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5 Our commitment to audit quality
 We define audit quality as:
ƒ Being independent and objective, and acting with integrity and professional skepticism

ƒ Complying with professional standards, including exercising due professional care

ƒ Deploying multidisciplinary teams, with appropriate skills and experience

ƒ Identifying risks at the companies we audit and designing appropriate audit responses

ƒ Leveraging a continuous improvement mindset, coupled with effective supervision

and review, to pace our work and address issues early

ƒ Using innovative technology, including AI and data analytics, to deepen our

understanding of a business and obtain better-quality audit evidence

ƒ Having honest, robust and timely communications with the audit committee
and management

The result: independent audit opinions that promote trust and confidence
in the capital markets

6 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Our transformation journey

We are on a transformation journey to drive sustained audit quality and enhance the experience of our clients and
our people. At the same time, we are reinforcing the cornerstones of our culture – being independent and objective,
acting with integrity, exercising professional skepticism, and being accountable for the quality of our work.

Key elements of our transformation include:

ƒ Leveraging AI, advanced data analytics and other technology, enhancing quality and improving the
experience for our clients and our people
ƒ Streamlining our audits, starting with robust risk assessments and data analysis, to help us focus on what
matters most
ƒ Fostering a continuous improvement mindset
ƒ Embracing centralization and standardization
ƒ Integrating our information technology (IT) professionals who work on audits into our Assurance practice
ƒ Expanding career development opportunities for our people

This report describes what we have accomplished so far and previews some of what’s to come as we bring our
vision of the future of audit to life.

“
We have a bold vision for the future of audit, and the future is now.
Dante P. D’Egidio
US Vice Chair – Assurance

7 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Modern approach
We are deploying next-generation technology, including AI, and processes that
deliver a more intuitive user experience.

Our auditors have been using our globally deployed, cloud-based audit platform for over a decade, These workflows are also connected to our EY Helix data analyzers. Our latest-generation general
and we continue to expand the functionality of that platform, which we call EY Canvas, to help our ledger analyzer, for example, allows our professionals to analyze full populations of data about a
professionals audit more effectively. company’s transactions, visualize trends, identify anomalies and understand how prevalent they
are, and drill quickly into the data so they can discuss it in real time with audit executives on their
Our teams now use intuitive guided workflows in EY Canvas to perform robust risk assessments teams and plan their audits. This allows our people to ask our clients better, more precise follow-up
in their data-driven audits. This enablement uses technology to walk our professionals through a questions and provide them with valuable insights about their financial reporting processes.
comprehensive series of factors to consider and automates certain activities, promoting consistent
audit execution and sustained audit quality. It also results in a streamlined and simplified approach Our technology interfaces directly with a company’s enterprise resource planning systems and
and will allow for a seamless flow of information throughout the audit. With the implementation of data repositories to help our professionals gather, analyze and prepare audit evidence in a
these tools we are also driving better audit quality and adding value for our clients. standard format.

8 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

AI-powered platform
At EY, we are deploying tools that responsibly integrate AI, giving our audit teams
greater confidence in their decisions and conclusions.

“
Building on our EY Canvas and EY Helix data analyzer platforms, we provide our professionals
with AI-powered tools that enable them to work more effectively and efficiently. Using these tools,
our audit teams are able to ask better questions and share sharper insights with our clients. We and our clients are rapidly expanding and accelerating the use of technology,
and we expect the next few years will bring significant transformation in the
To help us navigate the growing importance of technology in our audit practice, we recently
appointed a chief technology officer for the Assurance practice, who will guide our investments in way both we and our clients use AI. We continually enhance audit quality by
technology, including AI. leveraging the latest technology and data analytic tools.
In developing and deploying AI technology, we adhere to our Responsible AI Principles, which Richard Jackson
US Assurance Chief Technology Officer
mitigate the risks of using this type of technology.

9 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Our state-of-the-art The AI-powered tools that are currently integrated with our EY Canvas platform include:

EY Helix analytics ƒ EY Financial Statement Tie-Out tool, which accelerates the tie-out process by automating certain procedures such as validating
calculations and identifying inconsistencies that require follow-up, including in the notes to the financial statements, and enabling us

and automation to more quickly resolve questions with clients

ƒ EYQ Code Explainer, which translates an IT system’s program code into plain English to help our auditors understand the
help our teams: functionality of the automated portions of a company’s internal controls, ask better questions and validate the operation of those
controls
ƒ Easily understand data and end-to-end ƒ EY Intelligent Checklist, which uses generative AI to show auditors where a disclosure is included in financial statements so they can
processes, and quickly identify common easily evaluate its sufficiency and helps our clients and our auditors identify disclosures that require follow-up
processes vs. anomalies, enhancing our ƒ EY Canvas AI, which helps teams perform risk assessments by comparing a company’s key financial ratios to those of its peers and
risk assessments tracking relevant news reports about the company that they need to evaluate
ƒ EYQ Assurance Knowledge, which helps our people quickly research accounting and auditing questions by summarizing relevant
ƒ Automatically see key changes to people, material
process or technology used by our clients,
further increasing audit quality

ƒ Answer more questions on their own,

decreasing the time it takes our clients to Our teams also can use two general purpose, generative AI tools (our proprietary EY.ai EYQ
tool and Microsoft 365 Copilot) to help them perform tasks such as drafting workpapers and
support the audit
summarizing documents.
ƒ Quickly drill into data and processes,
without limitations on size or complexity
We are making significant investments in developing AI-powered tools as we continue to 2025 Gold
of data
shape the future of audit. For example, we are developing solutions that incorporate agentic
AI, which refers to AI systems that have the capability to interpret, plan and execute tasks Stevie Award:
with appropriate auditor oversight. We are also developing broader AI-enabled workflows
ƒ Generate automated workpapers at scale Ey.ai EYQ won in
across all areas of analysis and financial that provide real-time data analysis and generate comprehensive reports.
Generative AI category
statement line items Our people’s experience and professional judgment remain critical to planning and executing
a high-quality, technology-enabled audit. That’s why we will continue to provide our teams
ƒ Easily share sector and business insights
with training and guidance on how to use our AI and other automation tools appropriately.
for process improvements

10 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Streamlined
process ~65% 95%
Our auditors approach each day with a
continuous improvement mindset that
of public company audit hours of our audit and IT
we call The EY Way, leveraging cutting- were incurred before our professionals are Lean Six
edge technologies. clients’ balance sheet date13 Sigma white belt certified14

Our auditors focus on the following key concepts of continuous improvement that we emphasize in our formal
training and on-the-job coaching, and we call The EY Way: In our audit practice, we are using centralized teams to perform
ƒ Deepening our understanding of our clients’ business environments and the sectors in which they operate high-quality audits and drive consistency in our work by:
ƒ Using centralized teams and a standardized approach to drive consistency ƒ Performing key procedures related to complex matters such as
ƒ Performing more work before our clients’ balance sheet date and continuing to look for ways to do more work earlier impairment and business combinations
ƒ Completing work, including timely reviews, in shorter sprints ƒ Performing routine quarterly and annual independence procedures
ƒ Providing teams with tech-enabled project management tools and compiling certain information for audit committee communications
ƒ Making sure team members understand quality-of-work expectations prior to starting work ƒ Helping our teams efficiently capture data from the companies we
audit and analyze it effectively
Our multidisciplinary model allows us to tap professionals who specialize in a wide variety of topics like environmental
matters, cybersecurity, actuarial science, statistics and forensic accounting, in addition to more typical areas such as ƒ Using professionals who support the EY global organization to perform
tax and valuation matters. Having professionals who focus on these topics collaborate with our audit professionals certain audit procedures and other tasks for our US audit teams (these
professionals accounted for 25%15 of US audit hours in fiscal 2025)
helps us address changes in worldwide tax regimes, business models and the macroeconomic environment.

11 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

In a recent survey of our people,17

Thriving
professionals 81% 90%
We are investing in our people16 through expanded
career experiences that empower them to grow into
well-rounded leaders and shape their professional say that overall their EY say the work they do allows
future with confidence. experience is exceptional, them to continuously learn
indicating a high level of and develop new skills
satisfaction

From the moment professionals join our firm, we offer a career public accountant (CPA) track professionals — from tax to
experience designed to inspire, challenge and retain top talent. forensics to technology risk — building a broader skill set and
My expedition with the technology risk team gave me
We are investing in every stage of the journey: attracting high- deeper business acumen from day one. These experiences
potential individuals, immersing them in meaningful learning, are designed to accelerate readiness for CPA certification and a broader view of the client’s business and helped me
offering diverse and agile career experiences, and supporting leadership, while reinforcing our commitment to career agility. build meaningful relationships across teams. I gained
their professional growth and wellbeing. new skills, expanded my network and now feel more
As professionals advance, we continue to invest in their growth confident in my ability to deliver a high-quality audit
A cornerstone of this strategy is EY 360 Careers, our through rotational opportunities, personalized coaching and with a deeper understanding of the business.
reimagined early-career experience. Through structured access to cutting-edge learning programs, including AI training
“expeditions,” our audit professionals spend their first years and EY-sponsored master’s degrees. Our retention programs are George Kandel
Audit Staff
with the firm exploring different opportunities for certified designed to keep our top talent engaged and committed.

12 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

“
Recognition we have received
for being a top employer Career agility is how we empower professionals to grow with the business — not just within it. It’s our
responsibility to offer a career experience that builds business fluency, sharpens insights and equips
Only Big Four firm included on Fortune our people to lead with confidence in a shifting landscape.
magazine’s 100 Best Companies to Work
Diana Kutz
For list for 27 consecutive years US Assurance Talent Leader

---------------------

Recognized as a top accounting firm by Attracting top talent Recruiting at a glance

Vault Accounting 25
2,350
19
Recruiting exceptional talent is central to our audit
strategy. We build teams with a breadth of experiences
--------------------- and perspectives, because diverse thinking enhances audit professionals hired from college and university campuses in fiscal 2025
audit execution.
Among the top 20 employers for business
31%
20

graduates in Universum’s annual Most

Number of US audit professionals (on a full-time
Attractive Employers ranking increase in applications for entry-level audit jobs, allowing us to meet our fiscal 2026 hiring
equivalent or FTE basis)18 goal earlier than in the past

---------------------

2,450
Fiscal Fiscal Fiscal
21
2025 2024 2023
Partners and
Ranked in Top 10 on Seramount’s 1,443 1,375 1,187
managing directors summer and winter interns worked on our audits in fiscal 2025
(formerly Working Mother’s)
Senior managers
100 Best Companies 3,357 3,226 2,555

1,500
and managers 22
Seniors and staff 9,004 8,939 7,528

Total 13,804 13,540 11,270 interns for fiscal 2026 attended our Future Leaders Summit to learn about our culture and
the work we do

13 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Retaining our people Developing our people

Retaining our professionals — especially our strongest performers —
Investing in wellbeing
To promote on-the-job coaching and supervision for early career
is critical to maintaining continuity and delivering high-quality
professionals, we maintain appropriate ratios of executives to junior
audits. Our strong retention reflects the value our people see in the We continue to invest in the wellbeing of
members of our audit teams. Our partners and managing directors
experiences, development and support we provide throughout their our professionals. Our benefits include:
have on average 20 and 18.6 years of service,26 respectively.
journey, along with macroeconomic factors.
ƒ A flexible vacation policy that allows people
Ratios of audit executives to other audit professionals27
Retention23 to decide how much vacation they need
Fiscal Fiscal Fiscal
Fiscal Fiscal Fiscal 2025 2024 2023 ƒ Mental health support
2025 2024 2023 Partners and managing
Top- Top- Top- directors to staff through 1 to 8.6 1 to 8.8 1 to 8.5
rated
Overall
rated
Overall
rated
Overall ƒ Reimbursements of up to $3,00029 a
senior managers
year for wellbeing activities (e.g., travel,
Senior managers Senior managers and
and managers
88% 84% 87% 84% 86% 83% gym memberships, meal delivery services,
managers to seniors 1 to 2.7 1 to 2.8 1 to 2.9
and staff reimbursements for child, adult and
Seniors and staff 80% 76% 78% 76% 80% 75%
pet care)
All ranks
85% 79% 84% 79% 84% 78%
below partner Our learning programs on technical topics are designed to provide
ƒ Week-long summer and winter breaks so
the right training at the right time. We are also preparing our people
our people can recharge
to use our technology effectively, including AI-enabled tools. Through
About 51%24 of our audit and IT professionals who were recently
webcasts, digital learning modules, and in-person sessions with
promoted to senior signaled their intention to stay with the Firm
audit executives and junior professionals across the country, we are
longer term by participating in our Bank Your Bonus program. This
embedding technological fluency into the fabric of our audit teams.
program allows rising seniors to defer their $5,000 promotion
bonuses in exchange for a $25,000 payout in three years. The
percentage of audit seniors banking their bonus is at the highest Average learning hours by fiscal year28
level in the history of our program.25
2025 2024 2023
84 101 98

Our average learning hours in fiscal 2024 and 2023 reflect

additional learning related to our transformation.

14 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Distinctive client experience #1 or #2

EY is harnessing the power of our people and technology, including AI, to deliver
auditor
more timely and deeper sector insights that spark dynamic conversations and in 13 of the 19 sectors
represented on the US
deliver a distinctive client experience.
Fortune 100030

Our teams use our EY Helix General Ledger analyzer, which can handle full populations of data, We are drawing on the breadth of experience and knowledge of people across the Firm to provide
even for our largest clients. In fiscal 2025, we loaded approximately 480 billion lines31 of general our clients with updates on emerging topics and audit matters. For example, when our clients
ledger data from US audit clients into our tool. Using this data, our professionals combine their have questions, we bring in professionals who have deep knowledge of the subject matter. We also
sector knowledge with peer benchmarking to ask better questions and provide observations our produce publications that address a wide variety of business topics.
clients can use in their decision-making. The insights we glean from this data can help clients
improve their financial reporting processes. Our audit teams leverage data and their professional experience to provide fresh perspectives
to support our clients’ decisions on matters such as their adoption of technology, process
In developing these observations and insights, our professionals draw on their personal experience improvements or cyber risk management. Our audit teams can also tap into the resources of the
as well as our collective knowledge from auditing companies in key industries. All of our partners also EY Center for Board Matters to lead educational sessions for our clients.
connect with other EY partners and principals who provide non-audit services to clients in the same
sector and share thought leadership, insights and information about industry developments. With quality as our foundation, we are focused on delivering an independent audit that also provides
insights to our clients, so they can navigate the evolving landscape of finance with confidence.
We also have a team of more than 500 professionals,32 including data scientists and CPAs, with

“
special training in data engineering who work with our audit professionals to build on EY Helix, our
global analytics platform, and customize it to address the unique aspects of a company’s business
and the associated risks. In addition, we have centrally certified analyzers to address common Our audit teams are drawing on the power of our technology to provide
sector-specific issues, such as those in financial services. For example, our lending analyzer
helps teams understand the loan portfolio balances and underlying credit risk and analyze the distinctive sector insights that elevate the client experience.
distribution of credit risk parameters, rating changes or overdue balances. Natalie Deak Jaros
EY US Deputy Vice Chair - Assurance
15 Our commitment to audit quality
Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Audit quality and integrity are

our foundation
We continually reinforce the cornerstones of our culture – being independent
and objective, acting with integrity, exercising professional skepticism, and being
accountable for the quality of our work.

Our global organization, governance and culture In the US, an 11-member Governing Board35 oversees management in a variety of areas, including
strategy, risk management, regulatory compliance, financial performance and capital allocation,
EY US is a member firm of the EY global organization, Ernst & Young Global Limited, that allows
and is responsible for evaluating the performance and setting the compensation of the US
us to use auditors around the world to help us audit multinational companies. Every audit team
Managing Partner. The Board comprises 10 elected partners and principals, plus the US Managing
around the world, representing approximately 100,000 auditors,33 uses the same global audit
Partner, who also sits on the US Management Committee.
platform (EY Canvas), which allows for rapid global deployment of technology, including AI-powered
tools, methodology and training. More than 420,000 people34 at EY clients can use Canvas to Our culture is our foundation and is anchored in our values, which include integrity and the courage
communicate with their EY teams. to lead. The EY global organization reinforces these values and, with its All in strategy, supports
our vision of the future of the audit.

16 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Our system of quality management

Stakeholders need confidence in the capital markets to make understand the importance of consistently executing high-
important decisions that drive economic growth. Auditors play quality work. In the audit practice, that means we have strong
a critical role in building this confidence through their ability to acceptance and continuance policies, and we expect our
validate and interpret data objectively and independently. In this professionals to act with integrity and be accountable for the
way, audit quality plays a crucial role in creating long-term value quality of their work, executing every audit with professional
for all stakeholders. skepticism and due care, independence, and objectivity in
accordance with professional standards.
Providing high-quality audits has never been more important
than in today’s environment, due to increased global complexity, Our approach to the SQM risk assessment process includes input
the rapid movement of capital and the impact of technological and feedback from across our multidisciplinary firm to develop
changes. Designing, implementing and operating an effective new or update existing quality objectives, quality risks and
system of quality management (SQM) is essential to sustaining responses. The SQM is monitored to identify deficiencies that
high-quality audits. We maintain an SQM that meets professional require implementation of corrective actions and provide the
standards, including addressing applicable independence basis for annually evaluating the overall effectiveness of the SQM.
requirements.
We performed an annual evaluation in accordance with
We also live our values as demonstrated by our compliance with International System of Quality Management (ISQM) 1 and
the EY Global Code of Conduct. We continue to invest in our concluded that as of our annual evaluation date of 30 June
SQM and to promote enhanced objectivity, independence and 2025, our SQM provided us with reasonable assurance that the
professional skepticism as the fundamentals to our execution of system’s objectives were achieved.
high-quality audits.
We are updating our SQM to comply with the PCAOB’s new quality
We have taken a proactive and risk-based approach to our SQM, control standard (QC 1000), which is designed to increase audit
with a focus on mitigating risks that may have an impact on firms’ focus on risks to audit quality. The PCAOB has postponed
audit quality. The SQM is supported by strong governance from the effective date by a year to 15 December 2026, pending
EY US leadership, which drives a culture where our professionals Securities and Exchange Commission (SEC) approval.

“ We expect all of our people to act with integrity and be accountable for the quality of their work.
Julie A. Boland
US Managing Partner
17 Our commitment to audit quality
Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

“
Professional Practice has a critical role in transforming our audit approach and engaging with our
stakeholders, particularly as we increase our use of technology in the execution of audits.
We engage
with stakeholders by:
Katrina A. Kimpel ƒ Hosting meetings of chief financial officers and
US Vice Chair - Professional Practice of audit committee members to share views on
developments that may impact the financial
reporting environment
Supporting our teams coaching, and execute various risk management and quality ƒ Issuing thought leadership and hosting webcasts
control procedures. They frequently interact with teams and aimed at improving the quality of financial
Members of our Professional Practice group, who have deep
provide feedback to Professional Practice on the development of reporting by helping management, board members,
technical and sector knowledge, are driving audit quality by
audit guidance and enablement based on those interactions. investors and other stakeholders understand
developing and implementing guidance, enablement and
training for audit teams, performing risk management activities complex accounting and financial reporting issues
and monitoring our teams’ performance. The group actively
engages with standard setters and regulators and develops the Our ratio of Quality Network and Professional Practice ƒ Publishing insights and data compiled by our EY
Firm’s responses to promote high-quality financial reporting and partners and managing directors to all audit and IT Center for Board Matters to help board members
auditor’s reports for the benefit of investors. partners and managing directors is 1 to 6.36 fulfill their responsibilities and inform investors

Our Professional Practice group: ƒ Working with the Center for Audit Quality
Our Transformation Office helps drive our strategy and to generate more interest in the accounting
ƒ Engages with our audit teams and clients on complex profession and exchange views with investors and
accounting, auditing and financial reporting matters collaborates with Professional Practice and the Quality Network
to enhance audit quality. Focusing on the future, it drives audit committees on hot topics for the financial
ƒ Engages with stakeholders to promote high-quality financial intiatives to position our teams to continuously deliver smarter, reporting ecosystem
reporting, internal controls and audit reports
more effective audits.
ƒ Leads our testing and evaluation of the Firm’s SQM, including ƒ Providing sector-specific insights to help the
our inspections of completed audits and reviews of in- companies we audit improve their financial
Engagement with stakeholders
progress audits reporting
Our leaders actively engage with the SEC, the PCAOB, the
Our national Quality Network helps our teams implement new Financial Accounting Standards Board and other standard setters ƒ Developing university curricula that the Ernst
guidance and enablement, including enablement centered on the to share our perspective on matters that affect audit quality & Young Foundation provides free of charge on
consistent execution of robust account-level risk assessments. and financial reporting. Weighing in on these matters, including everything from introductory business courses
Quality Network professionals also perform workpaper reviews, providing comments on proposed rules and standards, is a critical to the latest developments in the profession,
advise our teams on audit matters, provide training and part of our mission of promoting transparent financial reporting. including generative AI, data analytics and ethics

18 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

Independence and objectivity

Maintaining our independence is critical to our ability to We proactively provide support to our professionals, including
perform audits in accordance with the standards that govern holding regular training with examples of situations that may
our profession. As auditors, we are required to be independent, arise to help them understand their reporting requirements. Our
in fact and appearance, from the companies we audit, in professionals can also ask members of our independence group
accordance with the rules issued by the SEC, the PCAOB, the for support through a live chat and use an EY app to check the
Code of Ethics for Professional Accountants of the International permissibility of investments before investing.
Ethics Standards Board for Accountants, and the standards of
the American Institute of Certified Public Accountants (AICPA). In accordance with PCAOB rules and our policies, our audit
teams also affirm the Firm’s independence in meetings with
We have policies in place to avoid potential conflicts of interest audit committees at least annually and describe matters that
and maintain our independence from the companies we audit. may bear on independence.
We also have tools to help us evaluate the independence of
our Firm and our people. For example, our policies require Independent advice on audit quality
managers through partners to report securities they and their
Leaders of the Firm and members of our Governing Board
immediate family members hold, as well as their other financial
meet regularly with our Independent Audit Quality Committee
relationships in the EY Global Monitoring System, which initially
(IAQC) and seek its feedback and advice about aspects of our
assesses and then monitors the permissibility of the investments
business, operations, culture, talent strategy, governance and risk
and arrangements. All client-serving EY US professionals,
management that affect audit quality. Members of the IAQC have
including partners, are also required to confirm compliance with
extensive experience in the financial reporting ecosystem.
our independence policies and procedures each quarter.

We monitor our compliance with professional standards that

relate to the Firm’s independence from audit clients as well as
the compliance of individuals with regulatory standards and our
policies that relate to personal independence. In fiscal 2025, we
monitored approximately 50,000 individuals37 across the Firm.

19 Our commitment to audit quality

Our transformation journey Modern approach AI-powered platform Streamlined process Thriving professionals Distinctive client experience Our foundation External inspections

External inspections Part I.A of the PCAOB’s inspection report, which is

released publicly, discusses deficiencies that relate
appeared, to the PCAOB, to have impaired our
independence. The most common instances of
to the sufficiency or appropriateness of evidence apparent noncompliance related to financial
The PCAOB conducts annual inspections of certain of our completed audits and issues we obtained to support our audit opinion(s) on the relationships, business relationships and non-audit
reports on its observations regarding findings it identifies in those engagements. The issuer’s financial statements and/or internal control services. In each of these instances, we concluded
PCAOB bases its selections largely on risk, and the inspections are designed to identify over financial reporting. The most common Part I.A that our objectivity and impartiality were not
deficiencies in audit work to help firms improve audit quality. deficiencies in our 2024 inspection report related impaired.
to testing the design or operating effectiveness of
Our inspection findings rate has significantly improved over the last three years. While controls selected for testing, testing controls over the Part II of the PCAOB report addresses the PCAOB’s
our 2025 inspection report has not yet been released, our preliminary results indicate accuracy and completeness of data or reports used observations about a firm’s system of quality control,
that the actions we have taken in recent years to enhance audit quality are having a in the operation of controls, and in some cases the based on both the results of its review of the firm’s
resulting overreliance on controls when performing quality control policies and inferences that the PCAOB
significant impact. We are proud to announce that we expect our Part 1.A findings rate
substantive testing. drew from what were, in its view, deficiencies in the
to fall below 10%38 of the 64 engagements inspected when the PCAOB issues its 2025
performance of individual audits. These observations
inspection report in the coming months.
Part I.B of the PCAOB’s inspection report, which are only released publicly if the PCAOB determines
The graphic below reflects the results of our PCAOB inspections in the last five is also released to the public, discusses instances that a firm has not addressed the criticisms to its
of noncompliance with PCAOB standards or rules satisfaction during the remediation period.
inspection cycles.
other than those included in Part I.A and Part I.C.
The Part I.B deficiencies in our 2024 inspection Peer review
Our PCAOB inspection findings rate has improved dramatically39
report related to required communications with the We participate in the AICPA peer review program that
50%
audit committee and management, our reporting requires a robust review every three years of a firm’s
on critical audit matters and on Form AP, and our system of quality control for its engagements that
testing of journal entries, among other topics. We
40% 46% have taken steps to address each of these findings.
are not subject to the PCAOB’s permanent inspection
program, including private company audits.
30% 37% Part I.C provides information on compliance with Grant Thornton LLP is performing our peer review
SEC and PCAOB independence rules that the PCAOB this year, primarily of audits for the year ended 31
20%
28% identified or that the firm identified and reported. December 2024, and that review is underway. EY US
received a rating of pass in its 2022 report on the last
21% Part I.C in our 2024 inspection report cited
noncompliance identified by the PCAOB related to
peer review. In that report, Grant Thornton said that
10% our system of quality control for these engagements
evidence of engagement preapproval by the audit
was suitably designed and complied with to provide
committee and unpaid fees for professional services.
the Firm with reasonable assurance of performing
0% We have taken action to address these matters.
Expected and reporting in conformity with applicable
2021 2022 2023 2024 professional standards in all material respects. Firms
decline in 2025 Part I.C also cited instances of noncompliance that
Inspection year we identified in a 12-month period in approximately can receive a rating of pass, pass with deficiency(ies)
4% of our issuer audits40 where we or our personnel or fail.

20 Our commitment to audit quality

Endnotes
1. Our $1 billion investment in technology and talent reflects our spending plans for fiscal years 2024 through 9. We determined that EY US is the No. 1 auditor of companies on Fortune’s list of the 1000 largest US companies
2027. Our fiscal 2025 ended on 27 June 2025. and those included in the Russell 3000 index by identifying the auditor for each company on the 2025 Fortune
1000 list and in the 2024 Russell 3000 index, based on SEC filings through 30 June 2025.
2. The preliminary inspection findings rate of below 10% that we expect the PCAOB to report for 2025 is based
on the written comments the PCAOB inspection staff has shared with us about completed inspections. The 28% 10. Our ranking as the No. 1 auditor among the Big Four accounting firms of companies that went public over the
findings rate for 2024 comes from our 2024 PCAOB inspection report. last 10 years is based on data compiled by Dealogic on US initial public offerings that were effective in 2015
through 2024 and the first eight months of 2025.
3. The number of US audit and IT professionals and the percentages of professionals at each rank are calculated
on a full-time equivalent (FTE) basis for fiscal 2025, which ended on 27 June 2025. An FTE represents 2,080 11. Our ranking as the No. 1 auditor that business leaders would consider using is based on the results of a survey
hours of work in a year, except that professionals who work more than 2,080 hours in a year are each counted of 1,000 business leaders that was conducted in April 2025 by TRUE Global Intelligence, the research practice
as a single FTE. of FleishmanHillard.
4. The percentage of public company audit hours incurred before our clients’ balance sheet date is calculated 12. Our statement that we audit six of the 10 largest companies on the Fortune 1000 is based on the SEC filings of
by dividing the number of hours incurred by US professionals before our US audit clients’ balance sheet date those companies through 30 June 2025.
by the total number of hours incurred on our audits. This metric is based on our audits of issuers, excluding
13. See endnote 4.
investment companies, with fiscal years ended 1 July 2024 through 30 June 2025.
14. See endnote 6.
5. The percentages of US audit and IT professionals who said they believe that they have a personal responsibility
for delivering quality on their audits and they understand that consistently performing quality audits serves the 15. The percentage of US audit hours incurred by professionals who support the EY global organization and
public interest are based on responses to the April 2025 EY Global Audit Quality Survey. perform certain audit procedures and tasks under the supervision of our US audit teams is calculated by
dividing the hours they charged to US audits (both public and private company audits) by total audit hours
6. The percentage of US audit and IT professionals who are Lean Six Sigma white belt certified, meaning they
charged for US public and private company audits in fiscal 2025.
have completed our continuous improvement training and demonstrated they have an understanding of the
Lean Six Sigma methodology for enhancing quality and efficiency, is calculated by dividing the number of audit 16. The metrics for fiscal 2025 and fiscal 2024 in the Thriving professionals chapter include both audit and IT
and IT professionals who have completed our training and obtained certification as of September 2025 by the professionals, except where noted. None of the metrics for fiscal 2023 include IT professionals.
total number of audit and IT professionals subject to this requirement. All of our audit and IT professionals who 17. The percentages of US audit and IT professionals who said their EY experience is exceptional and the work
work on audits are required to complete this training and be certified as white belts. New hires must meet this they do allows them to continuously learn and develop new skills are based on responses to the April 2025 EY
requirement during the first fiscal year they work with the Firm. People Pulse survey.
7. The percentage of restatements reflects restatements that SEC registrants we audit, including registered 18. The numbers of US audit and IT professionals are calculated on an FTE basis. The numbers do not include
investment companies, reported in SEC filings in each of our last three fiscal years to correct material errors professionals who support the EY global organization and worked on US public and private company audits
in previously issued annual financial statements. The percentage is calculated by dividing the number of in each of the three years. If their hours were converted into FTEs, their work was the equivalent of having
these restatements by the total number of issuers we audited in each year. In fiscal 2025, 7 (0.3%) of the SEC another 3,558, 3,324 and 3,056 full-time auditors in fiscal years 2025, 2024 and 2023.
registrants we audited restated their financial statements, compared with 15 (0.5%) and 14 (0.4%) in fiscal
19. The number of audit and IT professionals we hired from college and university campuses reflects the headcount
2024 and 2023, respectively.
of these people who joined our audit practice in fiscal 2025.
8. The percentages in the graph showing our PCAOB inspection findings rates reflects Part I.A findings rates in our
2021, 2022, 2023 and 2024 PCAOB inspection reports. Since the PCAOB has completed its 2025 inspections
but hasn’t yet issued its report, the further decline we expect in our 2025 PCAOB inspection findings rate is
based on the written comments the PCAOB inspection staff has shared with us about those inspections.

21 Our commitment to audit quality

Endnotes
20. The year-over-year increase in the number of applications for entry-level audit jobs is calculated based on the 29. The amount each professional can receive in reimbursements for wellbeing activities reflects the maximum
number of people who applied for those jobs between July and October of 2024 and 2023. reimbursement that was available in fiscal 2025.
21. The number of summer and winter interns who worked in our audit practice in fiscal 2025 reflect the 30. To determine our ranking as the No. 1 or No. 2 auditor in 13 of the 19 sectors represented in the Fortune 1000,
headcount of our audit and IT interns who worked on audits. we sorted the data we compiled to determine our market share of audits of Fortune 1000 companies (see
endnote 9) by sector for each of the 19 sectors represented in the list.
22. The number of students who attended our spring 2025 Future Leaders Summit for our interns to learn about
our culture and the work we do reflects the headcount of attendees. 31. The number of lines of general ledger data we loaded into our tool reflects data we received for US audits.
23. Our retention metrics reflect professionals who were continuously employed in our audit practice in each fiscal 32. The number of professionals who work with our audit teams to build on EY Helix, our global analytics platform,
year, including both audit and IT professionals in fiscal 2025. This metric is calculated by taking the headcount and customize it to address the unique aspects of a company’s business and the associated risks reflects the
of professionals we had at the beginning of a fiscal year in each category and deducting professionals who headcount of the professionals from that group who supported US audits for fiscal 2025.
left the Firm or transferred out of the audit practice during the year, then dividing this sum by the number of
33. The number of auditors at EY member firms around the world who use the EY Canvas platform is based on the
professionals we had at the beginning of the year. Promotions are treated as if the individuals were in their
global organization’s headcount as of 30 June 2025. All EY auditors use EY Canvas.
new ranks for the entire year. Our metrics on retention of top-rated professionals refer to individuals with the
highest performance rating at the beginning of each fiscal year. 34. The number of people at EY clients who use the EY Canvas platform to communicate with EY teams is based on
the number of people who were enrolled to use the EY Canvas client portal on 30 June 2025.
24. The percentage of rising audit and IT seniors who elected to bank their promotion bonuses under the Bank
Your Bonus program in 2025 is calculated by dividing the number of rising audit and IT seniors who elected to 35. The number of partners and principals on our Governing Board reflects the current composition of the Board.
participate in the program by the total number of rising audit and IT seniors. 36. The ratio of our Quality Network and Professional Practice partners and managing directors to all US audit and
25. Our statement that audit seniors’ participation in the Bank Your Bonus program is at the highest level in the IT partners and managing directors is calculated on an FTE basis for fiscal 2025.
history of the program is based on the percentage of audit seniors who participated each year the program 37. The number of individuals we monitored for compliance with professional independence standards, regulatory
was offered. standards and our policies related to personal independence reflects all professionals subject to independence
26. The average years of service of our audit and IT partners and managing directors reflect their tenure at EY US requirements across EY US.
through the end of fiscal 2025. 38. See endnote 2.
27. The ratio of partners and managing directors to other professionals is calculated by dividing the total number 39. See endnote 8.
of staff, seniors, managers and senior managers on an FTE basis by the total number of partners and managing
40. The percentage of issuer audits cited in Part I.C of our 2024 PCAOB inspection report reflects instances of
directors on an FTE basis. The ratio of senior managers and managers to seniors and staff is calculated by
apparent noncompliance with SEC or PCAOB rules that we identified in a 12-month period.
dividing the total number of staff and seniors on an FTE basis by the total number of senior managers and
managers on an FTE basis. The ratios for fiscal 2025 and 2024 include audit and IT professionals, while the
ratios for fiscal 2023 exclude IT professionals.
28. Learning hours reflect the average number of hours of learning our audit and IT professionals completed in
fiscal 2025 and 2024. Learning hours for fiscal 2023 do not include IT professionals. The average is calculated
by dividing the total number of learning hours completed by average headcount for each year.

22 Our commitment to audit quality

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