KPMG Faces Pressure to Prove Audit Training Improves Competency

The age of checkbox training is fading

KPMG auditors are entering a new era where completed training hours may matter less than whether those hours translate into sharper judgment on live engagements. The shift is not just academic. If regulators decide that competency matters more than course counts, then the people who rise fastest at a Big Four firm will be the ones who can show they learned something useful, not just that they clicked through a module.

That change lands at a sensitive moment for audit teams already under pressure from inspection findings, tighter quality expectations and the practical grind of busy season. For staff and managers, the message is clear: training is becoming part of the audit product itself, not a separate HR box to tick.

Why regulators are moving beyond CPE hours

A Thomson Reuters Tax & Accounting analysis published on April 27, 2026 argues that the old assumption linking continuing professional education hours with real competence no longer holds. The core point is simple: auditors can sit through required training and still struggle with complex judgments, documentation and evidence testing once they are back on an engagement.

That matters because the Public Company Accounting Oversight Board was created by Congress under the Sarbanes-Oxley Act to oversee audits of public companies and broker-dealers and protect investors. Its inspection process is built around selected audits and selected portions of those audits, so the public numbers are not a perfect mirror of every engagement a firm handles. Even so, those reports shape how the market judges audit quality, which makes training quality a strategic issue for every large firm.

The PCAOB’s own 2025 annual report showed it inspected more than 200 registered public accounting firms and reviewed more than 880 audit engagements. It also said it was entering a new era of leadership in January 2026 with renewed focus on its core mission. That backdrop helps explain why “hours logged” is losing ground to “show me the competency.”

What the KPMG inspection results say

KPMG has already felt the consequences of this tougher lens. In the PCAOB’s 2024 inspection report on KPMG LLP, 13 of the 64 audits reviewed were placed in Part I.A because the deficiencies were serious enough that the Board believed the firm had not obtained sufficient appropriate audit evidence to support its opinions.

The most common problem areas were familiar to anyone who has sat through an audit review cycle: controls testing, the accuracy and completeness of data or reports used in controls, identifying controls tied to significant accounts or assertions, and substantive testing for risks of material misstatement. Those are not minor technical misses. They go directly to whether an engagement team is prepared to defend its work when the file is challenged.

KPMG had already acknowledged the pressure. In its FY24 Audit Quality Report, the firm said it expected its 2024 PCAOB inspection report to show a Part I.A deficiency rate of 20 percent, which it described as its lowest since 2009. That is a useful reminder for employees inside the firm: even when the trend line improves, a 20 percent rate still signals meaningful vulnerability in the way audits are executed and reviewed.

Why this is a career issue, not just a compliance issue

For auditors, the training debate now reaches into career progression. At a large firm like KPMG, advancement is built on the assumption that each step up the ladder brings stronger judgment, better documentation and more reliable supervision. If regulators increasingly want evidence of demonstrated competency, then performance reviews may lean harder on how people apply standards in real engagements, not just whether they completed required learning.

That could change how managers are evaluated too. A manager who keeps a team out of trouble by coaching through live issues, correcting evidence gaps early and strengthening review notes may be valued more than one who simply ensures everyone finishes the annual training cycle. On the partner track, the stakes are even higher because quality failures now reflect not just on an engagement team, but on the entire control environment behind it.

There is a practical upside for workers as well. Better training that improves judgment, reduces deficiency rates and tightens supervision can cut down on rework, avoidable review comments and late-night fire drills. In a profession already shaped by busy season fatigue, that can make a real difference to work-life balance, especially for staff who spend too much time fixing issues that should have been prevented upstream.

How KPMG is trying to frame audit quality

KPMG’s FY25 Audit Quality Report suggests the firm already understands that audit quality is bigger than one metric. The report says KPMG takes a holistic view, looking at inspection results, restatement rates, use of technology and the effectiveness of supervision and review. It also points to a modernized system of quality control and the KPMG Clara platform as part of that effort.

That framing matters because it shows where the firm is heading. The point is not to defend CPE as a bad idea. It is to stop treating training like a receipt to file away and start treating it like part of the machinery that determines whether audit work holds up under scrutiny.

There is also evidence that the wider profession is moving in the same direction. The PCAOB said in March 2025 that inspection results across the six largest U.S. global network firms improved materially in 2024, with the aggregate Part I.A deficiency rate falling to 39 percent from 46 percent in 2023. For the Big Four, the rate fell to 20 percent from 26 percent. The Board’s own analysis pointed to more face-to-face work, stronger staff training, more resources devoted to quality and better supervision and review as likely contributors.

What comes next for auditors at large firms

The next test arrives on December 15, 2026, when new PCAOB standards QC 1000 and AS 2901 are set to take effect. QC 1000 requires firms to design and operate a comprehensive, risk-based quality control system. AS 2901 creates a framework for responding to engagement deficiencies after the auditor’s report has already been issued.

For KPMG professionals, that means the training model has to become more specific, more measurable and more closely tied to actual engagement outcomes. Generic learning will not be enough if the firm needs to show that people can identify risks, document decisions and respond to problems in a way that protects the audit opinion.

The larger lesson is blunt. The firms that win on quality will not be the ones that can point to the longest training calendars, but the ones that can prove their people are better auditors because of them. For anyone building a career in audit, that shifts the value of training from a compliance routine to a test of whether you are truly ready for the work in front of you.