• KPMG International paid Grant Thornton UK $357,000 for its 2025 audit, down from $416,000 in 2024.
  • The Big Four pressed for a lower fee, arguing AI-driven efficiency should be passed on as discounts.
  • Critics on social media pushed back: should AI reduce client fees or justify premium pricing for faster, smarter audits?
  • The move raises a broader question: is the traditional billable hour under threat in professional services?

What happened

KPMG International reduced the audit fee paid to its auditor, Grant Thornton UK, to $357,000 for the 2025 audit, a drop from $416,000 in 2024. That roughly 14% reduction was reportedly pushed by KPMG and other Big Four firms on the basis that artificial intelligence has cut the time and cost of routine audit tasks — and that those savings should be passed on to clients as discounts.

Why this matters

The change is more than a single line item. It forces a public reckoning over how professional services are priced as AI automates repetitive “grunt work.” Two straightforward but conflicting logics are now colliding:

  • Cost-passing logic: If AI reduces labor and time, clients should pay less. That argument fuels pressure for discounts and lower billable hours.
  • Value-pricing logic: Firms investing heavily in AI, controls and oversight may argue they deliver faster, higher-quality audits — a service premium, not a discount.

Which logic wins will shape audit economics and potentially the pricing models used across law, consulting, accounting and beyond.

Reactions and debate

Critics on social media went ballistic, debating whether AI-driven efficiency should shrink fees or whether firms should charge more for faster, smarter work that requires expensive AI investments and new expertise. The social reaction shows this is not only an accounting or procurement decision — it touches client expectations, professional credibility and how value is perceived.

Some industry observers say this could be the opening move in a broader shift away from strict time-based billing. Others caution that audits still require human judgment, oversight, and regulatory compliance — elements that are hard to commoditize and may preserve premium pricing for high-quality audits.

What comes next

Expect three immediate developments:

  1. More fee renegotiations. Large firms and clients will test how much AI savings should translate into discounts versus retained by firms to cover AI investments.

  2. New pricing experiments. Fixed-fee, subscription and value-based contracts will likely proliferate as firms seek predictable revenue while showcasing AI-driven benefits.

  3. A focus on transparency. Clients will demand clearer breakdowns: what work AI handled, what required human oversight, and how savings were measured.

Whether this specific KPMG–Grant Thornton fee cut is the start of the end for the billable hour remains uncertain. But it has already made one thing clear: AI is forcing clients, auditors and firms to renegotiate not just prices, but how professional value is defined and paid for.

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