Auditors and Sustainability Reporting: Ensuring Accuracy and Transparency in ESG Disclosure

Lia Nuraini; Amri Amrulloh

doi:10.69725/raida.v1i2.160

Authors

Lia Nuraini a. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia
Amri Amrulloh b. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

DOI:

https://doi.org/10.69725/raida.v1i2.160

Keywords:

Auditor, ESG Disclosure, Transparency, Accuracy, Sustainability

Abstract

Objective: To examine the role of auditors in enhancing accuracy, transparency, and quality of ESG disclosures in Indonesia.
Methods: Quantitative research using surveys, regression analysis, and SEM to assess auditor impact on ESG reporting.
Results: It believes that the presence of an auditor raises the accuracy of ESG disclosures, especially when the auditor is an external body as opposed to an internal auditor and that they increase the transparency and credibility of ESG reports. It was found that the absence of homogeneous sustainability reporting protocols is posing a big problem for auditors which impacts the audit process. The study also revealed that when companies incorporated audits into their ESG reporting, it dramatically enhanced the quality of the information disclosed, especially among organizations that prioritized sustainability initiatives.
Novelty: Furthermore, this study adds to existing literature specifically focusing on the Indonesian context where sustainability reporting practices are not yet in full force. This offers a fresh perspective on how solving accuracy and transparency in ESG disclosures through auditor involvement, specifically external audits. Further, publicly-financed/controlled enterprises are a specific focus of the analysis that has not been well addressed in the literature, but has unique challenges for auditors in developing markets like different reporting standards as well other civil service policy issues.
Research Implication: The findings provide valuable implications for both practitioners and policymakers to consider. Auditors have a critical role to play in the improvement of the accuracy and transparency of ESG disclosures and the enhancement of stakeholder confidence. Policymakers are encouraged to develop standardised ESG reporting frameworks to assist auditors in ensuring consistent, reliable and credible sustainability reports. This is particularly important in emerging markets such as Indonesia.

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Author Biographies

Lia Nuraini, a. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

Lia Nuraini
Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia
Amri Amrulloh, b. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

Amri Amrulloh, S.E, M.Ak
Lecture
Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

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