Explore the Legality of Statutory Audit by CMAs Globally. Learn why CMA audits are not legally accepted globally, with key reasons and professional insights.
Statutory audits are a cornerstone of corporate governance, ensuring the accuracy, reliability, and transparency of financial reporting. These audits must comply with national laws, international standards, and professional frameworks. In most countries, only Chartered Accountants (CAs) or Certified Public Accountants (CPAs) are legally authorized to conduct statutory audits.
However, a debate has emerged in certain regions over whether Cost and Management Accountants (CMAs) should also be permitted to conduct statutory audits. While CMAs are skilled professionals in cost control, budgeting, and management accounting, their scope of training and legal authorization does not align with the statutory audit function.
In this article, we explore 7 strong reasons why statutory audits conducted by CMAs are unlawful, not globally accepted, and inconsistent with international auditing practices.
1. Legal Provisions and Ordinance Restrictions: Legality of Statutory Audit by CMAs Globally
The first and most critical factor is legal compliance.
- In many jurisdictions, statutory audits are restricted to professionals registered under specific Acts or Ordinances.
- Example: In Bangladesh, the Companies Act specifies that only Chartered Accountants, registered with the Institute of Chartered Accountants of Bangladesh (ICAB), can conduct statutory audits.
- The Cost and Management Accountants Ordinance does not grant CMAs the authority to perform statutory audits.
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Allowing CMAs to conduct statutory audits would violate the law, making the audit report invalid.
2. Global Standard Practices: Legality of Statutory Audit by CMAs Globally
Across the world, International Standards on Auditing (ISAs) and professional regulations define who can act as statutory auditors.
- Almost all countries appoint CAs or CPAs for statutory audits.
- CMAs primarily focus on internal cost control and financial planning, not external assurance.
🌍 Global Norm: International Federation of Accountants (IFAC) recognizes separate roles for management accountants and statutory auditors.
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3. Professional Training and Expertise Gap
CAs and CPAs undergo rigorous training in:
- Corporate laws and regulations
- Financial reporting standards (IFRS, GAAP)
- Auditing procedures and evidence gathering
CMAs, on the other hand, are trained mainly in:
- Cost and management accounting
- Budgetary control
- Strategic planning
Result: CMAs lack statutory audit assignments in their practical training, which creates a skill gap in assurance and compliance work.
4. Conflict with Professional Frameworks
Professional bodies operate under distinct mandates:
- ICAB (for CAs) includes statutory audits in its core functions.
- ICMAB (for CMAs) focuses on cost and management accounting.
Authorizing CMAs to conduct statutory audits would violate their own ordinance and overlap jurisdictions, leading to professional disputes.
5. Risk to Audit Quality : Legality of Statutory Audit by CMAs Globally
Statutory audits require:
- Risk assessment skills
- Audit sampling expertise
- Fraud detection capabilities
Without statutory audit in their curriculum, CMAs may struggle to meet the quality expectations of stakeholders, creating a credibility risk for the audit process.
6. International Recognition Issues
A statutory audit is not just a local requirement — it is a global trust certificate for investors, regulators, and foreign partners.
- An audit signed by a CMA may be rejected by international bodies, lenders, or foreign stock exchanges.
- This can harm a company’s ability to raise capital or expand internationally.
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7. Curriculum and Learning Process
The educational framework of CMAs does not include statutory auditing as a mandatory professional competency this is Legality of Statutory Audit by CMAs Globally.
- CA programs require practical training in audit firms.
- CMA programs focus on management reporting and cost structures.
Since statutory audit is not covered in CMA training, assigning them this responsibility compromises the integrity and reliability of the audit.
Conclusion
While CMAs are essential to business success in cost management and strategic decision-making, statutory auditing remains outside their legal authority, professional scope, and global acceptance.
In summary:
- It is legally prohibited in many countries.
- It is not aligned with international best practices.
- It can reduce trust in financial statements.
For transparency, investor confidence, and compliance with both national and global frameworks, statutory audits should be conducted only by legally authorized and professionally trained auditors — typically CAs or CPAs.
