The 57-year-old has been at Portman Road since 2012, but speculation has mounted that the Villans have included his name on a shortlist of potential successors for Remi Garde (The Mail), who was sacked last Tuesday as the club sit on the brink of Premier League relegation.
The Tractor Boys remain in contention for a playoff spot in the Championship this season, with McCarthy's troops two places and five points behind sixth-placed Derby County as the battle for promotion hots up.
And Smith was unequivocal in his assessment that losing the former Republic of Ireland boss would be detrimental for Town going forward.
“We’ve improved on every season he’s been here so far, so it would be a massive loss for us (if he went to Villa),” Smith is quoted as saying by the Sudbury Mercury.
“Hopefully he’ll stay and the whole squad of players are backing him to stay. There’s not a lot we can do about it really so we just have to keep on doing our jobs.
“His career in management speaks for itself and it’s no surprise to us that he has been linked to jobs previously, while he’s been with us. A manager of his calibre is always going to be linked with jobs.”
McCarthy has won promotion into the Premier League on a number of occasions in the past, which might explain why he is reportedly on the shortlist. Barring a miracle, Villa will be relegated.
The Birmingham outfit sit 15 points adrift of relegation, rock bottom of the Premier League and their demotion seems imminent.