HUMAN RESOURCE ACCOUNTING AND THE QUALITY OF FINANCIAL REPORTING OF QUOTED SERVICE COMPANIES IN NIGERIA,

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Date
2011-09
Authors
Salisu, ABUBAKAR
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Abstract
ABSTRACT The transformation of modern economies from manufacturing to information and knowledge-based requires some modification to accounting and reporting procedures. The fast growth of service organisations in the 21st century, whose major asset is the human capital and the intellectual ability of their work force, prompted the need to look into issues surrounding the capitalisation of human resource expenditure/investment. This study assessed the impact of human resource valuation and reporting on the quality of information contents of Nigerian quoted service companies’ financial statements. The study also developed a model for measuring the value of human resource and how the value could be reported in the financial statements of quoted service companies in Nigeria. Descriptive and field survey research methods were employed in the study. Data were collected from the conduct of interviews, administration of questionnaire and financial statements of the selected quoted service companies. The data collected were analysed using Kendall’s Coefficient of Concordance (KCC), Pearson’s Chi-square technique, and the use of tables and percentages. KCC was used to find the concordance of selected experts regarding the nature and characteristics of human resource expenditure and necessity for their capitalisation. Pearson’s Chi-square was used to know the perceptions of questionnaire respondents on the significant effect that reporting human resource value would have on the ability of financial statements’ users to make informed decisions. The value relevance of the model developed was tested using Edwards-Bell-Ohlson Model. The study found that the nature and characteristics of investments on the human resource require them to be capitalised rather than expensed. The study established that the value relevance of financial reporting of quoted service companies in Nigeria will be improved by the application of the developed model; thereby boosting the informed decision making abilities of the multiple users. The study recommended that quoted service companies in Nigeria should imbibe the culture of capitalising and reporting all expenditures/investments on human resource that can improve their quality and productivity. Also, there should be a minimum standard of reporting human resource value in the financial statements of service companies especially in the balance sheet and notes to the accounts.
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BEING A Ph. D. DISSERTATION SUBMITTED TO THE POSTGRADUATE SCHOOL OF AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF DEGREE OF DOCTOR OF PHILOSOPHY IN ACCOUNTING AND FINANCE
Keywords
HUMAN,, RESOURCE,, ACCOUNTING,, QUALITY,, FINANCIAL,, REPORTING,, QUOTED,, SERVICES,, COMPANIES,, NIGERIA.
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