HUMAN CAPITAL ACCOUNTING COMPLIANCE AND CORPORATE FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

JOHN OHAKA, PhD
Department of Accountancy
Rivers State University Port Harcourt, Rivers State - Nigeria
Email: johnohaka@gmail.com
DANIEL PEPPLE
Department of Accounting, Faculty of Business Studies
Ignatius Ajuru University of Education Rumuolumeni
Rivers State – Nigeria
AND
OGECHI EBERECHI ALPHEAUS, ACA
Department of Accounting, Michael Okpara University of Agriculture, Umudike, Abia State,
Nigeria.
alpheausogechieberechi@gmail.com

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 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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