The Effect of Environmental Disclosure and Return on Assets on Firm Value with Audit Quality as a Moderating Variable (GoodWill Journal of Economics Management and Accounting)

Summary

• The study covers basic materials companies on the Indonesia Stock Exchange: 18 companies selected from a population of 113, yielding 90 observations.p.1
• Environmental disclosure has no significant effect on firm value (t = 0.509; p = 0.611).p.1
• ROA has a positive and significant effect on firm value, with a coefficient of 0.335, a t-statistic of 3.192 and a p-value of 0.001.p.9
• Audit quality moderates the effect of environmental disclosure on firm value, with a coefficient of -0.325, a t-statistic of 2.058 and a p-value of 0.040.p.9
• The interaction of audit quality and ROA has a coefficient of 0.623, a t-statistic of 2.540 and a p-value of 0.011.p.10
• The model explains 47.5% of the variation in firm value, with an R-square of 0.475 and an adjusted R-square of 0.444.p.8

Key insights

1. The sector's average PBV ratio rose from 1.36 in 2021 to 1.49 in 2022, fell to 1.32 in 2023, then rose to 1.79 in 2024 and 2.40 in 2025.p.2
2. The f-square values were 0.003 for H1, 0.146 for H2, 0.045 for H3 and 0.154 for H4.p.8
3. The Q² value of 0.350 indicates predictive relevance.p.8
4. The final dataset comprised 90 company-year observations (18 companies × 5 years).p.6
5. The direction of audit-quality moderation differs: negative for environmental disclosure and positive for ROA.p.12
6. Audit quality was operationalized as a binary Big Four versus non-Big Four classification, a simplified proxy.p.7