Firms’ Characteristics and Human Resource Accounting Disclosure in Nigerian Quoted Manufacturing Companies

Abstract

Human Resource Accounting (HRA) is a measurement process that recognizes the human resources of an organisation as an intangible asset, whose cost and value are included in the financial statements of an organisation so that the true value of the organisation can be established. An overriding challenge of HRA however, has been the lack of universal approach to reporting human resource contribution, and researchers have suggested that the valuation
of HR through HRA can be made possible if the reporting companies and professionals in the area of accounting agree on a universal model/approach for reporting human capital. This study examines other factors that might likely influence HRA disclosure, apart from the aforementioned. Specifically, the influence of firm characteristics such as turnover, age, market size and number of employees are examined in quoted Nigerian manufacturing companies. The study sample comprises 37 randomly selected companies from the consumer goods, industrial goods, and agriculture and conglomerate sectors. Secondary data, sourced from the 2015 Annual Reports of the sampled companies, are used and Panel data analysis is
applied for data analysis. Results show that firm turnover had no significant influence on human resource accounting disclosure, while age of business, market size and number of employees were found to have significant influence on human resource accounting disclosure in the companies. The study therefore concludes that, overall, firms’ characteristics influence
human resource accounting disclosure to a significant extent. The compelling need for Nigerian quoted manufacturing companies to leverage on the competitive advantages of increased human resource disclosure, rather than focussing only on the cost of doing so, was emphasised, particularly at this time that the nation’s economy is in the doldrums.