Dwindling auditor numbers will make FMIA assurance difficult, CPA tells Treasury

In a February 2026 submission, CPA Australia has said that the government’s proposed requirement for Future Made in Australia reports to be reviewed by registered company auditors (RCAs) was likely disproportionate, and would be hampered by talent shortages.

The $22.7 billion Future Made in Australia (FMIA) initiative is part of the government’s push to incentivise private investment in domestic manufacturing and the net zero transition over the next decade.

Treasury has stipulated that FMIA projects must follow “community benefit principles” that ensured the benefits of public investment flowed back to local workers, industries and communities. It proposed that firms’ community benefit reports should be reviewed by a RCA.

However CPA Australia said that the community benefit reports would be non-financial, principles-based reports, and that RCAs would struggle to assess them on objective standards.

Furthermore, dwindling RCA numbers would make it harder for firms to secure auditors to provide assurance for their reports. Over the 20 years to 2025, the number of RCAs declined from 6,173 to 3,073, ASIC figures have shown.

“Restricting eligibility to RCAs, whose qualification is tailored to Corporations Act financial statement audits in large to listed entities and other high-risk assurance engagements, would be disproportionate and would unnecessarily limit the pool of available practitioners, further constraining an already limited RCA cohort,” CPA Australia noted.

Instead, CPA Australia suggested the government adopt a “flexible eligibility model” that permitted both RCAs and other qualified assurance practitioners to undertake assurance activities for FMIA community benefit reports.

CPA Australia also warned that the FMIA community benefit reports would be difficult for auditors to assess as they were slated to include disclosures that lacked objective criteria, consistent benchmarks and verifiable evidence.

For example, FMIA recipients would be required to demonstrate a positive approach to workplace relations, support secure, ongoing and well-paid jobs, culturally appropriate engagement with communities and full, fair and reasonable applications.

“While a number of the proposed disclosures are capable of being subject to assurance under existing AUASB standards, a substantial proportion of the disclosures are framed in highly qualitative, aspirational and forward-looking terms,” CPA’s submission noted.

“These types of disclosures present significant challenges from an assurance perspective because they often lack objective, observable criteria, rely on management intent or future actions rather than historical evidence, and involve subjective judgements that cannot be independently corroborated.”

It added that to ensure the usefulness and credibility of possible audit activities, the government should ensure its principles included clear definitions, measurable indicators and objective criteria.

CPA Australia also suggested a “limited assurance” model could ensure assurance activities were targeted at higher-risk activities, leading to a more efficient allocation of compliance resources.

“Agreed-upon procedures engagements or component-based engagements may offer greater proportionality, flexibility and reduce compliance burden, as they allow the assurance practitioner and the engaging party to focus only on specific, well-defined elements of the Community Benefit Report,” the submission noted.

“This targeted approach avoids the need to form a conclusion over the entire report, limits work to procedures that are directly relevant to the Department’s objectives and reduces unnecessary effort on disclosures that are inherently qualitative, judgement-based or not suitable for meaningful assurance.”