Practices of Human Resource Accounting Disclosure: A Comparative Study across ASEAN Countries

Wiyadi Wiyadi,Rina Trisnawati,Nor Hazana Abdullah,Imanda Firmantyas Putri Pertiwi,Sayekti Endah Retno Meilani

doi:10.13189/ujaf.2021.090304

Abstract

Disclosure of human resource accounting is an important facet of sound corporate governance to ensure organizational sustainability. However, practices of human resource accounting disclosure (HRAD) have not been made mandatory among Asian countries and therefore to what extend the companies have reported their human resource accounting is not evident. This study aimed to describe HRAD practices among top ranked companies based on ASEAN Corporate Governance Scorecard which include Indonesia, Malaysia, Vietnam, Philippines, Thailand and Singapore. Assessment of HRAD practices was done based on sixteen criteria based on previous studies. A total of 195 companies were assessed based on their annual reports in year 2014 and 2015. The study found that Indonesia has the highest HRAD practices (71%), followed by Thailand (66%), Vietnam (65%), Malaysia (59%), Singapore (43%) and Philippines (40%). It is also found that separate HRAD is almost non-existent except a few companies in Philippines and Malaysia. This indicates that HRAD practices need to be institutionalized for better governance in Asean countries.

Highlights

Human resources are the vital assets of organization in terms of their contributions to organizational performance (Chand & Katou, 2007) and market competitiveness (Izvercianu, Radu, Miclea, & Ivascu, 2012) and long term sustainability (Boudreau & Ramstad, 2005). Kong & Thomson (2009) claimed that capabilities of human resources in forms of their intelligence, expertise, skills and abilities are the driving force of high performing organization
Recognizing its importance, attempts have been made since 1960s to quantify and recognize human costing in the balance sheet (Flamholtz & Bullen, 2002) which is widely known as Human Resource Accounting (HRA)
This study used descriptive statistics to describe human resource accounting disclosure (HRAD) practices among top ranked companies based on ASEAN Corporate Governance Scorecard which include Indonesia, Malaysia, Vietnam, Philippines, Thailand and Singapore

Summary

Introduction

Human resources are the vital assets of organization in terms of their contributions to organizational performance (Chand & Katou, 2007) and market competitiveness (Izvercianu, Radu, Miclea, & Ivascu, 2012) and long term sustainability (Boudreau & Ramstad, 2005). Kong & Thomson (2009) claimed that capabilities of human resources in forms of their intelligence, expertise, skills and abilities are the driving force of high performing organization. Human resources are the vital assets of organization in terms of their contributions to organizational performance (Chand & Katou, 2007) and market competitiveness (Izvercianu, Radu, Miclea, & Ivascu, 2012) and long term sustainability (Boudreau & Ramstad, 2005). Beattie, Smith, & Beattie (2010) assert that human resource is a significant value creation driver in knowledge-based economy. Its main processes involve identification, measurement and communication of human resources data to expedite effective organizational management. The practice of human resource accounting disclosure (HRAD) refers to the practice of recording, measuring, and presenting details of transactions related to employees in an organization including costs of recruitment, selection, performance, induction, training, development, welfare and payment of workers (Akintoye, Awoniyi, Jayeoba, & Moses Ifayemi, 2016)

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