As reported by Financial Times on February 6, included in Friday’s edition of Footnotes, and widely chuckled at by public accountants both current and former across the world since, KPMG asked its auditor for a discount because the audit shouldn’t be that hard. So say FT’s sources:
KPMG, one of the world’s largest auditors of public and private companies, negotiated lower fees from its own accountant by arguing that 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 rollout of AI and threatened to find a new accountant if it did not agree to a significant fee reduction, the people said.
As we told a tipster who sent this story to the tipline over the weekend, it’s funnier because it’s GT.
But wait! There’s more! According to FT, it was KPMG that told Grant Thornton they should be “using AI and other new technology to improve efficiency,” not necessarily that KPMG found out GT was using AI to save tons of hours of work and wanted a discount because of it. We’re not done. In what can only be described as an act requiring giant testicles the likes of which we did not expect KPMG to have, they told GT that “since Grant Thornton had been its accountant for several years, it knew the business well enough to do the work more quickly.” Per FT, KPMG paid 14% less in 2025 ($357,000) than they did in 2024 ($416,000).
GUYS. Did you not foresee this backfiring on you and your own audit business? Did the sound of clients making these same demands of you not reverberate across your skulls when you considered bringing this up to Grant Thornton? Do you not understand the Pandora’s box you’ve opened here?
Oh well. Clients, you know what you have to do.
So I surmise that someone at GT UK leaked this to the press as they are the only ones who would have reason to? That should make for a pretty awkward conversation with their client.
I can think of another possible candidate. Grant Thornton UK was recently acquired (excuse me, “invested in”) by Cinven. Granted, the audit practice has stayed “independent” in their alternative practice structure, but still…audit partners probably know who to talk to at Cinven to spread the word.
Does Cinven have any portfolio investments where KPMG is an auditor? Might those audit fees add up to more than a couple hundred thousand $?
Take off your sleuth hat, clown. There’s nothing worse than a 2nd year associate spewing out red herrings without a shred of evidence.
Sounds like amateur Adrienne spewing out lies.