The Case for Human Resource Accounting in Kenya

Abstract

This study investigates whether providing human resource. accounting information together with conventional accounting information would change investment decision It also investigates whether certain selected background variables and belief statements would explain investment decision when BRA information is provided To answer the questions raised, Companies were sampled and data obtained from them so as to value human resources of each of the Companies asset statements were t.hen prepared by adjusting the conventional ones provided., Out of these, two Companies were selected and their financial statements were given to 54 third year Bachelor of Commerce students doing finance course. They were also given . two other hypotneticaI Company financial statements ~ The students were to make investment decisions first with coventional financial statements and later with human asset statements. Comparison of t.be two decisions was used to measure whether there was a significant'change in the investment decision or not Results revealed that BRA information caused a significant change in investment decision when given together with conventional accounting information Though real Company data users tended to give different results, it would be argued that the position arose due to problems and limitations that were inherent in the real Company financial statements. Results also 'showed that none of the six variables investigated had any association with investment decision when human resource information is provided to the respondents The variables investigated included age, number of accounting courses done, length of working experience, number of articles on human resources read, type of subject preferred and second year GoP.Ae The overall conclusion was that it was human resource accounting information itself which caused differences in investment decisions. These favourable results, therefore, obtained from a laboratory experiment justify further research in the area to afford generalisations to real financial decision makers