Reform reshapes accounting in China and Malaysia
China and Malaysia are experiencing significant regulatory and economic change, putting pressure on accounting firms while creating new opportunities for those able to adapt.
Traditional compliance work is coming under pressure, while technology, specialist expertise, and advisory services, are becoming increasingly important.
Last month, MGI Worldwide members Cathy Zhang, partner at Cathy Accounting Firm in China, and Dusun Chong, partner at Kevin How & Co PLT in Malaysia, joined the International Accounting Bulletin (IAB) discussion, sharing their views on how reform, technology, and changing market conditions are shaping accounting services in their respective countries.
China: reform and rising pressure
China’s accounting profession is undergoing significant change, with tougher legislation, increased penalties and broader accountability placing greater pressure on firms. These changes come during a market downturn, with weaker demand for traditional audit and accounting services, fee competition and rising costs.
“While driving up compliance service demands, these changes also raise operational costs and regulatory risks for accounting firms. Traditional audit and basic accounting service demand has weakened as clients cut operational budgets. Intense market competition creates heavy fee pressure, squeezing profit margins across firms.”
— Cathy Zhang
Talent and transformation
Staff retention is another challenge, alongside growing demand for professionals who can combine financial expertise with technology skills. Cathy notes:
“The industry also sees an obvious mismatch between operational risks and returns, plus relatively low professional recognition. Nowadays, employers tend to recruit talents with both finance and IT expertise to advance digital and intelligent transformation.”
At the same time, new areas of demand are emerging. The overseas expansion of Chinese companies is increasing the need for international tax, accounting, payroll and advisory support, while digital transformation is driving demand for automated compliance and data analytics.
Malaysia: reform creates new opportunities
Malaysia is also undergoing extensive reform, with e-Invoicing, tax digitalisation, sustainability reporting, transfer pricing and changes to audit exemption reshaping the services businesses require. While this brings additional cost and complexity, it is also creating opportunities for accounting firms, particularly as SMEs look for support in adapting to new requirements.
Talent and technology reshape the market
Talent remains one of the profession’s biggest challenges. Firms increasingly need professionals who can combine accounting knowledge with skills in data, automation, sustainability and advisory services, while competition for those skills is intensifying across the region.
“Our southern neighbour’s systematic efforts to recruit and integrate high-potential Malaysian talent into their ecosystem, underpinned by robust branding and career development opportunities, has intensified the competition for our own local professionals. This ‘regional pull’ is not merely a recruitment issue; it is a strategic threat to the sustainability of Malaysian national talent pipeline.”
— Dusun Chong
Meanwhile, demand is growing for e-Invoice implementation, international tax and transfer pricing, sustainability reporting and outsourced finance, as technology changes both what clients need and how accounting firms deliver it.
Looking ahead
Despite the differences between the two markets, a similar picture is emerging. Regulatory reform, technology and changing client expectations are accelerating the move away from traditional compliance towards more specialised, technology-enabled and advisory services.
For firms able to invest in the right skills, technology and expertise, that change brings opportunity: to support clients through increasing complexity, develop new services and demonstrate the value of trusted professional advice.
Click the links for more information about our contributing member firms, Cathy Accounting Firm and Kevin How & Co PLT.
To read both Country Reports in the August edition of the IAB, members can click HERE (login to the MGI Worldwide member portal will be required).
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