The impact of ESG knowledge on internal auditors’ capability to assess ESG risks under IFRS S1 and IFRS S2 in Thailand
Keywords:
internal auditor, ESG knowledge, ESG risk assessmentAbstract
This study examines the effect of internal auditors’ ESG knowledge on their ability to assess ESG-related risks under IFRS S1, IFRS S2, and the COSO ESG framework. The research investigates internal auditors’ level of ESG knowledge, their capability to evaluate risk severity, and their accuracy in classifying ESG risk types, as well as comparing differences among groups with high, moderate, and low knowledge levels. The sample consists of 200 internal auditors holding CPIAT certification. The research instruments include a perception-based confidence scale, an objective ESG knowledge test (true/false), and scenario-based assessment items. Descriptive statistics and inferential analyses (MANOVA, ANOVA, and Post Hoc tests) were employed to compare risk-assessment performance among knowledge-level groups. The results indicate that ESG knowledge significantly influences internal auditors’ ability to assess ESG risks. Auditors with higher knowledge levels demonstrated more accurate risk-level evaluations and risk-type classifications than those with moderate or low knowledge. The results also show a difference between perceived knowledge and actual knowledge scores. Confidence levels are high, but objective knowledge is only moderate, which shows a big knowledge gap. This study underscores that ESG knowledge is a critical determinant of the quality of ESG risk assessment under IFRS S1 and IFRS S2. The results emphasize the need to strengthen internal auditors’ ESG competencies to support future sustainability reporting in alignment with emerging international standards.
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