Human Resource Accounting and Disclosure: An Evolving Indicator of Performance in Selected Nigerian Stock Exchange Listed Manufacturing Companies

Abstract:

This paper aims to study the reporting and disclosure of the human resource asset of manufacturing companies enlisted on the Nigerian Stock Exchange (NSE) and the extent to which such reporting affects the financial and operational performances of the selected manufacturing companies. To achieve this, the discourse attempts to specifically study the application of human resource as a vital asset which requires adequate reporting by listed companies as well as evaluate the positive or negative implications such reporting has on the performances of the companies. The study adopted ex-post-facto research design. Secondary data were collected and analyzed using descriptive and inferential statistics. Data were collected from the financial statements of ten (10) manufacturing companies which participate in stock trading transactions of the NSE regularly. The financial statements data were analysed using profitability for operational performance and leverage for financial performance of the ten (10) listed firms. Findings of the study reveal that the profitability of manufacturing firms have significant influence on operational performance while financial leverage indicates that there was a positive relationship between the variables i.e. an increase or decrease in financial leverage will have great effects on financial performance. The study concludes from its findings that adequate remuneration and incentives have significant relationship with operational and financial performance. The study therefore recommends that manufacturing firms should report all expenditure or investments incurred on human resource ranging from recruitment processes, remuneration, cost of training and development to incentives packages in their annual report. This will increase the value and relevance of the information content of their financial statements and hence improve the firm productivity likewise impact positively on the share price of the firm. It was also recommended that there should be an effective system of communicating employee benefits to the organization staff.