How AI Will Transform Accounting Firms in the Next 5 Years
Artificial intelligence is no longer a distant trend for the accounting profession.
AI in accounting firms is already automating bookkeeping, reshaping audits, and changing what clients expect from their advisors.
Malaysia’s accounting bodies are racing to close a talent gap even as this shift accelerates.
Over the next five years, the change will touch everything from data entry to strategic advisory.
This article looks at where that transformation is heading, and what it means for firms and the businesses they serve.
The State of AI Adoption in Accounting Firms Today
A 2025 Thomson Reuters survey found that 21% of tax and accounting firms now use generative AI.
Another 53% are planning to adopt it or actively considering it.
Only 25% have no plans at all, down sharply from 49% just a year earlier.
Sentiment has shifted too: 68% of tax and accounting professionals say they feel excited or hopeful about GenAI’s future in the industry.
Malaysia’s journey has been slower to start.
Only 13% of Malaysian accounting firms had adopted AI by 2017, and just 8.1% by 2018, trailing other ASEAN markets.
The Malaysian Institute of Accountants (MIA) reported over 38,500 members as of mid-2023, against a national target of 60,000 qualified accountants by 2030.
That workforce gap is one reason AI adoption in Malaysia is now gathering pace.
A 2024 Karbon report found that 71% of accounting professionals believe AI has the potential to bring substantial change to the industry.
Mordor Intelligence projects the AI-in-accounting market will grow 30% year-over-year through 2027.
Among firms already using GenAI, over half rely on general-purpose tools like ChatGPT rather than industry-specific platforms.
That gap suggests plenty of room for purpose-built accounting AI to grow over the next five years.
How AI Is Automating the Back Office
AI agents can now handle transaction categorisation, daily reconciliations, and invoice processing around the clock.
They flag anomalies in real time rather than weeks later during a review.
Continuous bank matching and auto-categorisation are also making the traditional month-end close obsolete.
Instead of a rushed weekly or monthly scramble, financial reports can be live and continuously updated.
As one industry analysis put it: real-time information increasingly means real-time decisions.
For accounting teams, this shifts the job from processing transactions to reviewing and interpreting them.
AI's Growing Role in Audit and Assurance
Deloitte has built generative AI and agentic capabilities directly into its audit platform for document review.
EY has combined its own technology with strategy and risk services to support more than 160,000 global audit engagements.
PwC reports productivity gains of 20% to 50% in its development processes through customised AI applications.
It expects to complete an end-to-end AI audit solution by 2026.
KPMG, meanwhile, has built a framework to help firms design and deploy AI tools responsibly and ethically.
In practice, AI is increasingly acting as a first-pass reviewer.
It screens transactions before a human ever sees them, flagging duplicates, misclassifications, missing tax codes, and possible fraud patterns.
That does not remove the auditor from the process.
It frees them to focus on complex judgment calls and higher-risk areas instead of routine checks.
The Shift to Predictive, AI-Powered Advisory
Rather than reviewing what already happened after month-end, AI tools can now flag a cash flow problem while there is still time to act.
They can suggest budget adjustments and alert business owners when a key metric drifts off track.
This raises the bar for what clients expect from their accountants.
Real-time dashboards and predictive alerts are becoming standard rather than a premium add-on.
For firms, differentiation increasingly comes from the quality of the insight and advice, not simply the speed of delivery.
"In cross-border deals, the difference between a smooth transaction and a costly delay often comes down to catching a problem early. AI now lets our teams flag those issues across many more engagements than a partner could ever review manually — but the judgment on what to do about them still has to come from experience."
How AI Will Reshape Accounting Careers and Skills
At the same time, it names AI and big data as the fastest-growing skill category for 2025 to 2030.
Roughly 46% of tax professionals surveyed by Thomson Reuters see generative AI as some degree of threat to jobs.
But most industry analysis points to role realignment rather than wholesale replacement.
New positions are emerging: AI operators who manage and audit AI agents, client analysts who interpret data, and advisory leads with deep industry specialisation.
Roughly a third of tax firm leaders now factor GenAI skills into their hiring decisions.
What remains hard to automate is just as important: client relationships, ethical judgment, and strategic advice.
Firms and professionals who build genuine AI fluency, rather than avoiding it, are best placed to move into these higher-value roles.
What This Means for Accounting Firms in Malaysia
Malaysian firms face a specific set of adoption barriers.
Staff resistance to new technology remains significant, particularly where teams fear the change threatens their roles.
Smaller firms often lack sufficient historical data to build reliable analytical models.
Cybersecurity is a serious concern too, given how much sensitive financial data accounting firms hold.
There is also a genuine opportunity in this shift.
Cloud-based AI tools are leveling the playing field between large and mid-sized practices.
A firm no longer needs a Big Four-scale headcount to offer real-time dashboards and predictive analytics to its clients.
Firms with strong international networks are well placed to bring proven AI-enabled practices to Malaysian clients while adapting them to local regulatory and reporting requirements.
ShineWing TY Teoh, a member of ShineWing International and the Praxity alliance, is one example of a Malaysian firm combining local expertise with a global network as the profession adapts.
“Our clients don’t just want AI-generated numbers faster — they want a firm that understands their industry and their regulatory environment well enough to know which numbers actually matter. That’s where a network like ours, with the ability to draw on international best practice while staying close to Malaysian requirements, becomes a real advantage.”
The MIA’s continued guidance will be important in helping firms of all sizes adopt AI responsibly as adoption accelerates nationally.
Managing the Risks of Responsible AI Adoption
Algorithms can make errors when they encounter data scenarios they were never trained on.
Poor data quality or embedded bias can lead to confidently wrong conclusions.
Because AI systems in accounting access vast amounts of financial data, they are attractive targets for cyber attacks, making regular security reviews essential.
Overreliance is a human risk as much as a technical one. Accountants must maintain professional scepticism rather than accepting AI-generated conclusions without question.
Firms that pair AI adoption with clear governance frameworks, regular audits of their own AI tools, and ongoing staff training are best positioned to capture the benefits while managing the downside.
Regulators and professional bodies are also paying closer attention.
As AI tools take on more of the audit and assurance workload, oversight of how those tools are validated and used is likely to tighten over the next five years.
Firms that build strong internal controls around their AI systems now will be better prepared for that scrutiny later.
Frequently Asked Questions
1. Will AI replace accountants in the next five years?
Judgment-heavy work such as advisory, complex tax planning, and client relationships is much harder to replace and is where accountants are expected to focus more of their time.
2. What accounting tasks can AI already automate?
Tax research and return preparation are also increasingly supported by AI-powered platforms.
3. Is AI adoption slower in Malaysia than in other countries?
However, sentiment has shifted, with most professionals now expecting AI to bring substantial change, and adoption is accelerating.
4. What skills should accountants develop to stay relevant?
Strategic advisory skills and strong client relationships remain equally important.
5. How can a smaller accounting firm start adopting AI safely?
Pair any new tool with clear governance, staff training, and a plan for reviewing its outputs before scaling further.
Conclusion
Over the next five years, the firms that adapt their processes, invest in their people’s skills, and adopt AI with proper governance will be the ones that thrive.
Those that ignore the shift risk falling behind on both efficiency and the quality of advice clients now expect.
For Malaysian businesses navigating this transition, working with a firm that combines local expertise with global best practice matters more than ever.
ShineWing TY Teoh’s advisory team can help you assess where AI fits into your finance function and plan the transition with confidence.
About the Author
Teoh Toh Yeap, Group Managing Partner, ShineWing TY TEOH
Teoh Toh Yeap is the Group Managing Partner of ShineWing TY TEOH, with more than 20 years of experience in public practice as a Chartered Accountant. He advises on IPO and pre-IPO planning, M&A, and cross-border tax structuring, and has supported listings on Bursa Malaysia, Nasdaq, HKEX, SGX and the Frankfurt Stock Exchange.
