Abstract
The study examined the influence of Human Resource Accounting (HRA) practices on managerial decision-making. Data for the study were gathered via a structured questionnaire on a 5-Points Likert Scale administered on personnel of Accounting, and Audit/Internal Control departments which were considered to be the relevant departments for this study in 16 quoted firms in the Nigerian financial services sector. The questionnaires distributed were returned and analyzed using a simple regression analysis model. The study found that HRA has a significant impact on managerial decision-making of organizations. It was therefore recommended that organizations should be more proactive in the use of HRA to enhance decision-making. Necessary and relevant standards should also be provided on the need for recognizing human resource cost in organizations’ statement of financial position in order to enhance adequate decision-making in business organizations premised on fair financial reporting.
Highlights
The trend of operation and the rate of competition among businesses in the global world calls for timely, effective and efficient decision to ensure success in terms of outstanding performance and eventual survival in a highly competitive economic environment
Business enterprises often proclaim that their labour force is their most important asset, while at the same time they fail to recognize it in managerial planning, decision-making and in published annual reports (Fariborz & Rajashekar, 2011)
The study of Fariborz and Raiasheka (2011) on Iranian companies supported the above findings. The results of their findings revealed that human resources accounting (HRA) information can play a critical role in internal managerial decision making and its measures can be used to show that that investment in company’s human resources may result in long term profit for the company
Summary
The trend of operation and the rate of competition among businesses in the global world calls for timely, effective and efficient decision to ensure success in terms of outstanding performance and eventual survival in a highly competitive economic environment. The importance of human assets as a key factor to the success and survival of the organization among other resources such as money, machine, minute (time) cannot be over-emphasized. Business enterprises often proclaim that their labour force is their most important asset, while at the same time they fail to recognize it in managerial planning, decision-making and in published annual reports (Fariborz & Rajashekar, 2011). To ensure complete business information goal congruence, Enyi and Adebawojo (2014) stated that there is need to value human asset and reflect this value in the financial statement like other intangible assets; the need for Human Resource Accounting (HRA) data disclosure. Micah, Ofurum and Ihendinihu (2012) concludes that human resource accounting information of an organization is a very important factor for decision makers in an era of knowledge based economy.
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