AI costs savings in audit

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. 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. 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.

(Adapted from “KPMG Pressed Its Auditor To Pass On AI Cost Savings,” by Stephen Foley, published on February 6, 2026, by the Financial Times)

Has the US hit peak tariff?

For the past year, Donald Trump’s tariff mania has shaken the world economy. Firms and governments have been forced to contend with an ever-shifting patchwork of levies, deals and exemptions. Threats have been made and withdrawn, most recently against various European countries over Greenland and against South Korea over its supposed failure to implement a trade deal with America. A looming Supreme Court decision may force yet another pivot if the justices rule against Mr Trump’s use of emergency economic powers to impose a tax, which is ostensibly Congress’s job. But while the money they earn for America’s government surged after the president launched his all-out trade world war in April, it is no longer rising. The latest figures suggest that January’s haul (after seasonal adjustments) will be the lowest since September. Uncle Sam’s take may go downhill from here.

(Adapted “Has America Hit Peak Tarriff?” published on February 1, 2026, by The Economist)

Pressure on the greenback

“Confidence, especially international confidence, is a fragile flower,” warned William Treiber, a long-serving Federal Reserve official, to colleagues on the central bank’s rate-setting committee in 1961. “We must be constantly alert to conduct our monetary and fiscal affairs so that we provide no basis for those abroad to raise questions regarding the ultimate soundness of the dollar.” As Kevin Warsh prepares to lead the world’s most important central bank, the dollar looks more vulnerable than at any time in recent history. It is hard for treasuries to be safe havens when the American government itself is driving the turmoil. In the language of a horror movie, the call is coming from inside the house. However, if large, patient investors turn their supertankers away from America, the greenback could come under irresistible pressure.

(Adapted from “Why The Dollar May Have Much Further To Fall,” published on February 5, 2026, by The Economist)

Former colonisers

Imagine if Europe had a single army. Would this rich continent, with a population bigger than America’s, be the geopolitical wallflower it is today? Surely not. Unified armed forces drawing on millions of Germans, Poles and others would let nervy Europeans shrug off both Russian revanchism and the fear of American abandonment. Alas, the 27 countries that form the European Union today retain 27 bonsai armies under national command, each duplicating what its neighbour is doing. Yet declaring military matters a strictly national affair was not the original blueprint for European integration. Under a treaty signed in 1952, just as the club that later became the EU was being created, France, Germany, the Netherlands and others agreed that the process of ever-closer union should start with merging their armed forces under a single command. The mind boggles at what might have been: a European superstate as comfortable projecting military power as it is regulating vacuum-cleaner wattage.

(Adapted from “How Its Long-Lost Empires Still Shape Europe,” published on January 29, 2026, by The Economist)

Published in Dawn, The Business and Finance Weekly, February 9th, 2026