EFFECT OF HUMAN RESOURCES ACCOUNTING ON FINANCIAL PERFORMANCE: AN EMPIRICAL EVIDENCE FROM THE MONEY DEPOSIT BANKS IN NIGERIA

Human resource accounting is the act of gathering data on human resources, measuring it, and sharing it with relevant parties so they may make informed investment decisions. In order to assure efficiency and effectiveness in their operations, businesses have recently moved their attention to human resource accounting. The impact of human resource accounting on the financial performance of Nigerian banks was the main subject of this study. The issue that inspired the study is the widespread practice among Nigerian banks to inefficiently account for the input of human resources in their annual statements. As a result, rather than capitalizing human resources in their statement of financial position, these banks instead expend them in their income statement, lowering their profit after tax. The broad objective of this study is to determine the extent to which human resource accounting affects the financial performance and value of Nigerian Banks. This study is therefore considered significant because, there are still universally, grey areas to be sorted out on the subject matter of human resources accounting. In the bid to achieve the study objectives, the researcher gathered data from ten money deposit banks. Data were collected from both primary and secondary sources using an ex-post facto research design. Following collection, the data were tabulated and subjected to multiple regression analysis. According to the first hypothesis's findings, there is a substantial correlation between the capitalized cost of human resources and the banks' post-capitalization profit before tax in Nigeria. The outcome of hypothesis two showed that there is a substantial correlation between the capitalized human resource cost and the post-capitalization net worth of Nigerian banks. According to the conclusion of Hypothesis 3, there is a sizable difference in the profit before tax of Nigerian banks before and after capitalization. The study concludes that human resources accounting positively influenced financial performance of banks in Nigeria within the period under study. It is advised that standards be established for measuring and identifying human resources in the banking industry. It is also advised that management of commercial banks in Nigeria have a proper understanding of human resource accounting. Managers will be able to make the best decision possible when investing in human resources thanks to this. Additionally, the study suggests that policies aimed at improving the post-capitalization profit before tax of banks in Nigeria pay close attention to capitalized human resource costs, net worth, and total assets as these variables significantly influenced the post-capitalization profit before taxes of the studied banks in Nigeria. The study's limitations are related to the small sample size of companies and years used in the analysis.