HUMAN CAPITAL ACCOUNTING COMPLIANCE AND CORPORATE FINANCIAL PERFORMANCE: FOCUS ON DEPOSIT MONEY BANKS IN NIGERIA

HUMAN CAPITAL
ACCOUNTING COMPLIANCE AND
CORPORATE FINANCIAL
PERFORMANCE: FOCUS ON
DEPOSIT MONEY BANKS IN
NIGERIA
JOHN OHAKA, PhD
Department of Accountancy
Rivers State University Port Harcourt
Rivers State - Nigeria
&
DANIEL PEPPLE
Department of Accounting
Faculty of Business Studies
Ignatius Ajuru University of Education
Rumuolumeni
Rivers State – Nigeria
&
OGECHI EBERECHI ALPHEAUS
Department of Accounting
Michael Okpara University of Agriculture,
Umudike
alpheause@gmail.com
ABSTRACT
Human
capital
accounting
involves
identifying and reporting investments in
human resources, with emphasis on
measurement of costs incurred to recruit,
select, hire, train and develop human capital.
It upholds matching of cost and revenue;
organizing records and communicating
financial information efficiently. These
imperatives are conceptually underscored by
Akintoye (2012), Edom, Inah and Adanma
(2015), and Umaru (2017), amongst others.
Using secondary data published by the
Nigerian Stock Exchange, this study
investigates the relationship between human
resource
accounting
and
financial
performance of deposit money banks in
Nigeria. The specific dimensions are
compensation
cost,
training
and
development
cost;
while
financial
performance has return on assets as proxy.
Data analysis utilises descriptive and
inferential tools (including mean, standard
Accounting and Finance Research Association
deviation,
correlation
and
multiple
regression), facilitated by Statistical Package
for the Social Sciences. The results indicate
that return on assets of the banks is
significantly associated with compensation
cost (t = 0.850; p = 0.037 <0.05); training and
development cost (t = 0.726; p = 0.046 <
0.05), and health and safety cost (t = 0.975; p
= 0.031 < 0.05). This establishes that human
capital accounting has significant relationship
with financial performance of deposit money
banks in Nigeria. Based on this conclusion, it
is recommended that the banks should
promote financial reporting efficiency by
ensuring the capitalization of human assets
and implementation of innovative training
and development schemes. They should also
upgrade the work atmosphere to make for
good health and high morale, and ultimately
drive higher performance in the Nigerian
financial sector.
Keywords: Accounting trends, Deposit money
banks, Human capital, Nigerian economy.

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