Audit regulators found serious deficiencies in nearly half the KPMG LLP audits they scrutinized in their last two years of inspections, according to reports issued Friday.

In what amounted to a public rebuke, the Public Company Accounting Oversight Board also unsealed some harsh criticisms of KPMG it had made in the past, in which the regulator suggested the Big Four accounting firm had been less committed to audit quality than it had claimed to be.

The...