Frequency and Quality of Environmental Audits and Environmental Sustainability in Malaysian Public Institutions: Evidence from Stakeholder and Legitimacy Perspectives

Abstract

This paper looks into the role of extended audit tasks in ensuring a sustainable reporting system by improving corporate accountability and transparency. To narrow down on the topic of sustainability auditing, it emphasizes the role of sustainability auditing in protecting the interest of the investor and ensuring that the greater and more demanding global Environmental, Social, and Governance (ESG) standards are met. Based on the information of 700 participants in Malaysian institutions of the public both on the national and regional level, the results indicate that the state-level ESG audits are positively linked to increased ESG disclosure, with the frequency of audit being a major contributor. The bigger the public organization, the more likely it is to adopt a sustainability audit. The research paper is relevant to the sustainability assurance literature in that it highlights the necessity of standard and similar sustainability measurement systems. It also proposes an obligatory sustainability audit of bigger entities and encourages the application of artificial intelligence and blockchain technologies to increase the efficiency of the audit, decrease its costs, and improve the financial transparency of the Malaysian setting.