The U.S. Public Company Accounting Oversight Board (PCAOB) found unacceptable deficiencies in audits of U.S.-listed Chinese companies performed by KPMG in China and PriceWaterhouseCoopers in Hong Kong, the government agency said Wednesday.

The U.S. audit watchdog published the findings of its inspections after gaining access to Chinese company auditors' records for the first time last year following more than a decade of negotiations with Chinese authorities.

The deficiencies were so great that auditors failed to obtain sufficient evidence to substantiate companies' financial statements, PCAOB Chair Erica Williams told reporters on Wednesday. The two firms represented 40% of the market share of U.S.-listed companies audited by Hong Kong and mainland China firms, she said.

Spokespeople for KPMG and PWC did not respond immediately to requests for comment.

While the findings are consistent with what the agency usually discovers when gaining access to a foreign country's audit records for the first time, they will likely raise worries among global investors over the accuracy of U.S.-listed Chinese companies' public financial statements.

"The fact that we found so many deficiencies is really a sign that the inspection process worked, and now we can go about the work of holding firms accountable and driving audit quality," Williams said.