In this study, X-ray photoelectron spectroscopy (XPS) was used to study chitosan–graphene oxide (chitosan–GO) incorporated with 4-(2-pyridylazo)resorcinol (PAR) and cadmium sulfide quantum dot (CdS QD) composite thin films for the potential optical sensing of cobalt ions (Co2+). From the XPS results, it was confirmed that carbon, oxygen, and nitrogen elements existed on the PAR–chitosan–GO thin film, while for CdS QD–chitosan–GO, the existence of carbon, oxygen, cadmium, nitrogen, and sulfur were confirmed. Further deconvolution of each element using the Gaussian–Lorentzian curve fitting program revealed the sub-peak component of each element and hence the corresponding functional group was identified. Next, investigation using surface plasmon resonance (SPR) optical sensor proved that both chitosan–GO-based thin films were able to detect Co2+ as low as 0.01 ppm for both composite thin films, while the PAR had the higher binding affinity. The interaction of the Co2+ with the thin films was characterized again using XPS to confirm the functional group involved during the reaction. The XPS results proved that primary amino in the PAR–chitosan–GO thin film contributed more important role for the reaction with Co2+, as in agreement with the SPR results.