Human Resource Accounting and Quality of Financial Reporting of Quoted Oil and Gas Companies in Nigeria

Abstract

Financial reporting is a veritable tool that provides information to all stakeholder’s for the purpose of decision making. The preparation and presentation of the report is done by the human asset. Building public confidence for capital market participants, transparency, and trust are very germane in any capital market. Poor earnings quality, opportunistic earnings and biased financial report portents great fears in the mind of investors and analysts alike in making rational investment decisions. The study investigated the effect of human resource accounting on quality of financial reporting (using earnings quality, accounting conservatism, earnings smoothness and persistence as proxies) of quoted oil and gas companies in Nigeria. The study adopted ex-post facto research design. The population of the study was 12 oil and gas companies in Nigeria. Purposive sampling technique was used and considered 12 oil and gas which had secondary data information that covered a period of 10 years from 2004 -2018. The null hypothesis (H0): Human Resource Accounting does not have significant effect on financial reporting quality in oil and gas companies in Nigeria The empirical findings of financial reporting quality revealed that the human asset provided the basis for these improvement in oil and gas companies with the results F(8.133)=65.13 (P – value=0.000); Adjusted R2=0.315 and F(5.102)=217.6 (P – Value=0.000); Adjusted R2=0.323. The study concluded that human resource accounting has significant effect on financial reporting quality of quoted oil and gas companies in Nigeria. The study recommended that the regulatory bodies should find ways of rewarding companies that comply with the regulatory guiding standards and comply with information disclosure for earnings quality assessment and sanction erring companies that conceal relevant and purposeful information from the stakeholders.