Desmiyawati Desmiyawati

Type of the article: Research Article

Abstract
The increasing demand for environmental and social impact information has made the sustainability report a crucial instrument for building stakeholder trust in corporate conduct in this era. This study aims to provide empirical findings on the impact of corporate governance mechanisms, such as independent commissioners, institutional ownership, and gender diversity, on the disclosure of sustainability reports with external assurance as a moderating variable. The study is quantitative research that employs Hayes’s moderation model bootstrapping technique. It covers 867 observations of non-financial companies listed on the Indonesia Stock Exchange over the period 2018 to 2023. Results show that independent commissioners (p < 0.01) and gender diversity (p < 0.05) positively and significantly affect sustainability report disclosure. Conversely, institutional ownership had no significant impact (p > 0.05). For the moderating effect, the interaction terms of external assurance and independent commissioners, and external assurance and institutional ownership are negatively significant (p < 0.05), indicating that external assurance weakens the relations in these cases. The interaction between external assurance and gender diversity was negative but insignificant for sustainability reporting (p > 0.05). This study concludes by examining whether the role of third-party assurance or internal governance mechanisms can positively affect the quality of reporting. The results suggest that third-party assurance, when used to enhance internal governance mechanisms, does not optimally improve the quality of reporting. The latter result reveals that third-party guarantees for non-financial firms have not amplified the effects of corporate governance mechanisms on the quality of sustainability reports.

Acknowledgments
We want to acknowledge the Ministry of Education and Technology for its support of this study with contract numbers 102/C3/DT.05.00/PL/2025 and 19483/UN19.5.1.3/AL.04/2025. We also thank the LPPM Riau University for its research cooperation, as well as the entire team that supports this research.

Type of the article: Research Article

Abstract
The increasing importance of intangible resources and narrative disclosure in a knowledge-based economy has raised critical questions regarding their role in shaping corporate investment behavior, particularly within state-owned enterprises operating under complex institutional constraints. This study examined the direct effect of intellectual capital on investment decisions and evaluated the mediating roles of annual and audit report readability in this context. The empirical analysis is based on a balanced pooled data set of 20 non-financial Indonesian State-Owned Enterprises (SOEs) listed on the Indonesia Stock Exchange for the period 2018–2023, totaling 120 firm-year observations. These firms, representing strategic sectors such as infrastructure, energy, and telecommunications, were selected due to their high asset intensity and pivotal role in national development under bureaucratic oversight. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the results reveal that intellectual capital has a significant positive effect on investment decisions (β = 0.401; t = 7.075), explaining 18.7% of the variance, which increases to 53.6% when incorporating firm-level control variables. Conversely, intellectual capital does not significantly influence report readability, and neither readability measure affects investment decisions, indicating an absence of mediation effects. Firm size emerges as the primary determinant, while profitability and leverage remain insignificant. In conclusion, investment decisions in Indonesian SOEs are driven by internal resource efficiency and organizational scale rather than narrative clarity. These findings suggest that in bureaucratic environments, report readability reflects compliance-oriented disclosure rather than effective informational signaling, highlighting a transparency paradox.

Acknowledgment
This research was made possible through the full support of Universitas Riau, particularly via its Institute for Research and Community Service.