A CRITIQUE OF THE CONCEPT OF HUMAN RESOURCE ACCOUNTING

The idea of human resource valuation and reporting existed for more than half a century. The concept continues to be debated by economic, accounting, and psychology theoreticians universally. The main thrust of Human Resource Accounting (HRA) is to identify, quantify and report investments made on human resources of an organization that are not presently accounted for under conventional accounting practice. This study critically assesses the concept of HRA in order to unveil its strengths and weaknesses. The study adopted an expository approach and uses secondary data collected through documented texts, journal articles, and other publications. Descriptive and content analyses were used in collecting and collating the necessary information on HRA. The study revealed that the conceptualization of HRA, the ideas incorporated therein, and supporting arguments are good for the accounting profession and corporate financial reporting. This inference was drawn considering the quantity, quality, and superiority of the arguments in support of its application. It was also revealed that the application of HRA will boost the quality of the information contents of corporate financial reports and provide users with more useful information in making their decisions. The study, however, recommends that more interest should be accorded to the concept of HRA by both accounting theoreticians and practitioners in order to stimulate more comprehensive researches aimed at simplifying the concept and boosting its applicability. Also, the existing models and methods proffered under the HRA should be adequately reviewed and objectively criticized so that more comprehensive and easy-to-apply methods/models could be invented.