Accounting for human asset investments in Nigerian quoted firms : the crucibles and plausible

Abstract EN

This study was undertaken in Nigeria, against the critical concern that profit, as reported in the accounts of many Nigerian quoted firms cannot realistically pride as true and fair reflection of their financial positions.

Traditionally, in the balance sheet, only expenditure on machinery, equipment, land acquisition and other fixed assets are treated as investments, while human asset investments are included as expenses in the profit & loss (P&L) account.

This survey involved a population of 207 firms listed on the Nigerian Stock Exchange (NSE).

At 0.05 level of significance, the sample size was functionally determined and specified as 136 firms, out of which 100 (73.5%) provided timely requisite data.

The fundamental analytical computation was the regression index of coefficient of determination (R2).

The results clearly established the visibility and severity of existing passive human asset accounting treatment as well as the desirability and materiality of the constructive alternative.

The former approach indeed undermines the reality that employee-related expenditure portends substantial longterm benefits to the firms.

Although the crucibles on the path to strategic change are glaring, it is recommended that practitioners should harness the plausible(s) of process reengineering, represented by the latter approach, to reinvent the books and holistically redefine the corporate looks of Nigerian quoted firms.