Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.4, No.13, 2013 7 Human Resources Accounting Disclosures in Nigeria Quoted Firms Dr. A.O. Enofe, Dr. C. Mgbame, Sunday Otuya*,Christopher Ovie Department of Accounting, University of Benin, Benin City. Email of corresponding author: otuyasun@yahoo.com Abstract This study was carried out to ascertain the relationship between firms’ financial performance and human resources accounting disclosures on one hand, and the differences in human resources accounting disclosures reporting level between financial sector and non-financial sector companies quoted in the Nigerian Stock exchange.The study made use of secondary sources of data in eliciting the required information needed for this research. The sample size consisted of fifty (50) listed firms randomly drawn from all sectors in Nigeria. Multiple Regressions was used to analyze the possible relationship between firm financial performance and Human resource Accounting Disclosure in Nigeria, using the statistical package for social science (SPSS) version 15.0.The study finds that a positive relationship exists between the financial performance of a company and its level of Human Resource Accounting Disclosure. The study also indicates that financial companies are disclosing human resources accounting information more than non financial companies and that company’s profitability positively influences companies to report the human resources accounting information in their annual report. Keywords: Human resource, financial performance, disclosures. Background to the Study Human Resource is a term which refers to the set of individuals who make up the workforce of an organization or a business entity. According to Syed (2009), it comprises the energies, skills, talents and knowledge of people which are, or which potentially can be applied to the production of goods or rendering useful services. The success of any organization depends on the ability of the human resources to effectively and efficiently optimize other resources such as land, equipment and money hence human resources are the greatest assets at the disposal of businesses. This is why the statement “our greatest assets are our people” is declared in most companies’ annual reports. Human resource accounting is the process of identifying and measuring data about human resources and communicating this information to interested parties. Okpala & Chidi (2010), explain that human resource accounting relates to the quantification in monetary terms of human resources employed by an organization and assert that a well-developed system of human resource/capital accounting could contribute significantly to internal decisions by management and external decisions by investors. The work of Bassey & Tapang (2012) points to the fact that human resources .have been identified as one of the main sources of competitive advantage by many organizations in today’s economy. Particularly, the private sector organization is widely diverse and has focused on human resources as having special strategic value for organization development. Abdullahi & Kirfi (2012) maintain that the quantification of the value of Human Resources helps the management to cope up with the changes in its quantum and quality so that equilibrium can be achieved in-between the required resources and the provided human resources. As a result, it becomes imperative to put measures in place to effectively manage people with their needs and expectations to enhance productivity. Therefore, proper appreciation of human resource accounting will enable managers take appropriate decisions regarding investment in human resources. It will also provide comparative information regarding costs and benefits associated with investments in human assets. Statement of Problems Though the idea of accounting for human resources started many years back, the concept still lacks general acceptability (Bowers, 1973). Many authors and scholars have conducted researches on how humans within an organization can be valued and reported in the financial statements of such organization.(Schulz, 1961; Hermannson, 1964; Likert, 1967; Bowers, 1973; Flamholz, Bullen & Hua, 2002). Human resource accounting and reporting by corporate organizations is still at the infant stage in Nigeria. Some of the companies that have invested heavily in human resources and have applied human resources accounting in one way or the other in Nigeria include Unilever Plc, Nigeria Breweries, Cadbury Nigeria Plc, Nestle Foods Nigeria Plc, Access Bank Plc, Zenith Bank Plc, amongst others. The investments by these companies in human capital development are normally not reflected in their balance sheets as assets but expensed in the profit and loss accounts. (Okapla & Chidi, 2010; Micah, Ofurun & Ihendinihu, 2012). The major challenges encountered in the recognition of human