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The moderating role of audit quality in ESG disclosure and cost of debt nexus: Asian evidence

Thi Hanh Dung Truong et al.

Managerial Auditing Journal2026https://doi.org/10.1108/maj-07-2024-4395article
AJG 2ABDC A
Weight
0.50

Abstract

Purpose This paper aims to investigate the moderating role of audit quality in the relationship between disclosure of environmental, social and governance performance (ESG disclosure) on cost of debt and test the aforementioned nexuses in developed and emerging markets. Design/methodology/approach The authors apply two-step system generalized method of moments estimator to analyze a sample of 6,011 observations from 1,443 Asian listed companies during 2015–2023. Further assessments are made on developed and emerging Asian subsamples, also across different firm characteristics. Data has been collected from Refinitiv Eikon. Findings Audit quality improves creditors’ responses toward ESG disclosure of firms in various institutional settings and firm attributes. Practical implications This study highlights the use of high audit-quality service as a reliable tool to promote the sustainability of listed companies in both developed and emerging markets. Originality/value This research underscores: the significant moderating role of audit quality in the link between ESG disclosure and cost of debt; the employment of auditor fees as an alternative proxy for high-quality audit; the infusing institutional difference hypothesis logic with legitimacy theory in explaining ESG disclosure attempts of countries in dissimilar markets; and the infusion of legitimacy theory with agency theory to emphasize the essential role of audit quality in legitimized efforts and reducing information asymmetries.

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https://doi.org/https://doi.org/10.1108/maj-07-2024-4395

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@article{thi2026,
  title        = {{The moderating role of audit quality in ESG disclosure and cost of debt nexus: Asian evidence}},
  author       = {Thi Hanh Dung Truong et al.},
  journal      = {Managerial Auditing Journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1108/maj-07-2024-4395},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.