Currently AK-47 and M4 do same amount of damage, being 10. Both do 10 damage, from bodypart being hit.
If you want to balance it out, without dropping to same level as MP5 (8 damage per shot) having 9 damage per shot would force you to hit 11 shots. Even then, you want to help the recoil of AK-47 a bit (Currently, it doesn't matter if killing takes 9 or 10 shots due to lag difference, it won't count all the hits anyways). Lag is especially bad with high recoil weapons. (Funny fact is, that AK-47 has almost most recoil of any weapons, since shotguns don't suffer from recoil) The spread being same for both weapons (every bullet goes clockwise of the white pixel in middle of the crosshair, every shot increases the distance from the white dot, but the clockwise spray pattern is the same. Technically, you could hit all the shots even when you spray, if you can control it by moving the mouse around the target, extremely difficult however.
What I would do, is decrease M4's damage by two, to drop the damage to same as MP5, but keep the weapon accurate-> It'd be better in long range fights and burst shots, (90 metres distance from eachother, good for tapping) while decreasing AK-47's recoil by a bit, and keeping the damage at 10. (Still works in long range, if you tap the shots)
This way you get M4 more bursty weapon, and AK-47 is more of a spray weapon, while keeping both weapons effective. I wouldn't increase the damage of AK-47, as it can get out of hand fast (reminding, that combat shotgun does 40% damage when all pellets hit, and sniper does 41%, desert eagle 46%)