Climate change disclosure, sustainability assurance, and audit quality in ASEAN public companies

The issues of climate change and sustainability transparency are becoming increasingly important in global corporate governance, particularly in improving the credibility of financial reports and audits. This study examines the effect of climate change disclosure on audit quality in public companies in Indonesia and Malaysia, while also testing the role of sustainability assurance as a moderating variable. Using panel data from 50 public companies listed in both countries during the period 2019–2024, this study applies a panel data regression model to analyze the effect of climate disclosure on audit quality and evaluate the moderating function of sustainability assurance. The results show that climate change disclosure has a positive effect on audit quality, indicating that companies that are transparent in reporting climate risks tend to produce more credible audits. On the other hand, sustainability assurance also contributes to improving audit quality, although it is not significant as a moderating variable in the relationship between climate disclosure and audit quality. This study provides empirical contributions to the development of literature related to audit quality and climate disclosure in developing countries, particularly in the ASEAN region, and offers practical recommendations for regulators, auditors, and company management in improving transparency and audit quality in sectors vulnerable to climate risks. In addition, the study contributes to the attainment of Sustainable Development Goal (SDG-13): Climate Action through its focus on the role of corporate disclosure and assurance practices in addressing climate-related risks and enhancing governance structures.