KPMG, one of the world’s largest auditors of public and private companies, negotiated lower fees from its own accountant by arguing that artificial intelligence (AI) will make it cheaper to do the work, according to people familiar with the matter.
The Big Four firm told its auditor, Grant Thornton UK, it should pass on cost savings from the roll-out of AI and threatened to find a new accountant if it did not agree to a significant fee reduction, the people said.
The discussions last year came amid an industry-wide debate about the impact of new technology on audit firms’ business and traditional pricing models. Firms have invested heavily in AI to speed up the planning of audits and automate routine tasks, but it is not yet clear if this will generate savings that are passed on to clients.
Grant Thornton is auditor to KPMG International, the UK-based umbrella organisation that co-ordinates the work of KPMG’s independent, locally owned partnerships around the world.
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Talks with Grant Thornton were led by Michaela Peisger, a long-time audit partner and executive from KPMG’s German member firm, who became KPMG International’s chief financial officer at the beginning of 2025.
As well as saying the auditor should be using AI and other new technology to improve efficiency, KPMG International argued that its books were not especially complicated and that, since Grant Thornton had been its accountant for several years, it knew the business well enough to do the work more quickly.
KPMG International said it did not comment on “confidential commercial arrangements” but accounts filed at the UK’s Companies House last month show that Grant Thornton did accede to a significant fee cut.
KPMG International paid $357,000 in total for the 2025 audit, according to the filing, down from $416,000 in 2024, a 14 per cent reduction in dollar terms, though the fee would have been paid in sterling.
Grant Thornton also declined to comment on the fee negotiations.
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Figures from Ideagen Audit Analytics, which tracks public company disclosures, have shown audit fees continuing to climb as accounting firms ploughed money into AI investments in recent years. Its survey of the European market, published in November, found average audit fees rose in every country bar one in the previous year.
KPMG’s behind-the-scenes argument that new technology could justify a fee cut for its own audit could embolden companies to press their accountants for similar reductions.
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Grant Thornton and KPMG have boasted of improvements from using AI. Grant Thornton UK’s head of digital audit, Gary Jones, wrote in a blog post in December that the work was becoming “faster” and “smarter”.
Grant Thornton told the FT: “High‑quality audits rely heavily on expert human judgment, so our fees reflect both the cost of our people and the cost of the technology that supports them. As these two elements evolve, pricing models may do the same.”
KPMG has said its systems now include generative AI tools that help auditors refine risk assessments, develop substantive testing procedures and enhance audit documentation.
In a statement to the FT, KPMG International said that, “while it is true AI can create efficiencies, developing and operating AI systems can generate additional costs”.
It added: “Audit pricing is influenced by various factors, from the complexity and scale of the audit to the levels of expertise and technology required to deliver it ... We believe that, when it comes to audit, AI’s most likely and most powerful impact will be to improve audit quality.” – Copyright The Financial Times Limited 2026
