Last week, the Financial Times reported that Big Four accounting firm KPMG "threatened" to drop its auditor, Grant Thornton, if it didn't pass along savings from the use of AI tools. The company made the case that AI will (eventually) make the work faster and cheaper, even if it hasn't already.
Is it a fair ask or a slippery slope? While it worked for KPMG, which reckoned the ask was financially prudent, the reality is that it might have opened up a black box in the services industry. It begs the question: If your auditor is replaceable, why wouldn't you be, too?
After all, KPMG is openly experimenting with AI tools, too. That's a signal, in part, that it's time to make similar demands. By conceding that they're experimenting with AI tools, they are giving their clients leverage to make similar demands on the basis that the industry simply suspects that there will one day be cost savings from the efficiencies. (There are no guarantees, though.)
Of course, this is nothing new for Big Four firms — they (and other professional services) have been facing a race to the bottom for decades. The only difference is that now, the same tools they tout could end up becoming their competition. Goldman Sachs, for example, recently partnered with Anthropic on a six-month-long project to automate mundane accounting tasks. OpenAI is hiring salespeople to pitch enterprise agents to businesses. This suggests that a fair many firms might soon be embarking on experiments of their own.
This introduces some big questions; not just for the accounting profession, which is facing a dearth of skilled talent, but all industries. AI optimists swear by new tools (like AI agents and large language models) to bolster productivity and bring about lower prices for goods and services. For those reasons, it might be too early to declare the "Billable Hour" dead for good, but it might as well be on life support.
But why would any business voluntarily make less money or pass along savings? Well, it might be because they have to. Well, at least until Big Tech finally starts charging firms more money to account for that half-a-trillion dollars worth of AI capital expenditures coming this year.
