Human resource accounting disclosure (HRAD) practices: Evidence from banking industry in Bangladesh

Year 2023, Volume: 5 Issue: 2, 52 - 59, 15.12.2023

Aminul Islam , Md. Mazharul Alam , Hasibul Islam

https://doi.org/10.58251/ekonomi.1307975

Cited By: 3

Abstract

The study investigates 28 banks listed on the Dhaka Stock Exchange's degree of human resource accounting disclosure standards. The study took into account a two-step procedure to gauge the extent of HRA disclosure in the annual reports of each distinct bank for each year: Building the human resource accounting disclosure index and grading the disclosure items are the first two steps. The data were analyzed using descriptive statistics, tabulation, and graphical representation. The outcome shows that banking organizations' accounting disclosures for human resources are still in their infancy. Standard, Southeast, and Mercantile Banks collectively disclose the most HRA information, while ICB Islamic Bank Ltd. discloses the least information. The study has the implication for current professional practice and is an important addition to existing literature in the arena of human resource accounting disclosure.

---

Keywords

Human Resource Accounting (HRA), Human Resource Accounting Disclosure (HRAD), Human Resource Accounting Disclosure Index (HRADI), Content Analysis, Bank.

Human resource accounting disclosure (HRAD) practices: Evidence from banking industry in Bangladesh

Abstract

The study investigates 28 banks listed on the Dhaka Stock Exchange's degree of human resource accounting disclosure standards. The study took into account a two-step procedure to gauge the extent of HRA disclosure in the annual reports of each distinct bank for each year: Building the human resource accounting disclosure index and grading the disclosure items are the first two steps. The data were analyzed using descriptive statistics, tabulation, and graphical representation. The outcome shows that banking organizations' accounting disclosures for human resources are still in their infancy. Standard, Southeast, and Mercantile Banks collectively disclose the most HRA information, while ICB Islamic Bank Ltd. discloses the least information. The study has the implication for current professional practice and is an important addition to existing literature in the arena of human resource accounting disclosure.

References

• Ahmed, A.A. (2009). Compliance of financial disclosure in corporate annual reports of banking sector in Bangladesh (Unpublished PhD Dissertation). University of Rajshahi, Bangladesh.
• Ahmed, M., & Nicholls, D. (1994). The impact of non-financial company characteristics on mandatory compliance in developing countries: The case of Bangladesh. The International Journal of Accounting, 29(1), 60-77.
• Akhtaruddin, M. (2005). Corporate Mandatory Disclosure Practices in Bangladesh. International Journal of Accounting, 40,399-422.
• Ali, L., & Barda, A. (2022). Human resource accounting disclosure practices of Indian IT companies. International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 32(2/3), 309-321.
• Ali, M., Hossain, M. S., Anik, R. H., & Sahid Hossain, M. (2020). Determinants of human resource accounting disclosure: an analysis on Dhaka stock exchange (DSE) listed financial institutions. Jahangirnagar J Business Stud, 9(1), 181-196.
• Ali, M.M., Khan, M.H.U.Z. & Fatima, J.K. (2008). Intellectual capital reporting practices: Evidence from Bangladesh. Dhaka University Journal of Business Studies, 29 (1), 23-45.
• Bala, S. K., & Habib, A. (1988). Financial reporting to employees – Bangladesh case, Dhaka University Business Studies, 19 (1), 215-36.
• Barney, J.B. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17 (1), 99-120.
• Belkaoui, A., & Kahl, A. (1978). Corporate Financial Disclosure in Canada. Research Monograph No. 1 of Canadian Certified General Accountants Association, Vancouver.
• Brummet, R. L., Flamholtz, E.G., & Pyle, W.C. (1968). Human resource measurement: A challenge for accountants. The Accounting Review, 43, 217-224.
• Chow, C.W. & Wong-Boren, A. (1987). Voluntary Financial Disclosure by Mexican Corporations. The Accounting Review, 62(3), 533-541.
• Cooke, T. E. (1989). Disclosure in the Corporate Annual Reports of Swedish Companies. Accounting and Bus. Research,19 (74), 113-124.
• Cooke, T. E. (1991). An Assessment of Voluntary Disclosure in the Annual Reports of Japanese Corporations. The International Journal of Accounting, 26, 174-189.
• Flamholtz, E. (1985). Human Resource Accounting. Jossey-Bass Publishers.
• Flamholtz, E. (1999). Human Resource Accounting: Advances in Concepts, Methods, and Applications (3rd ed.). Jossey-Bass.
• Flamholtz, E. G., Bullen, M. L., & Hua, W. (2002a). Human resource accounting: A historical perspective and future implications. Management Decision, 40(10), 947–954. https://doi.org/10.1108/00251740210452818.
• Flamholtz, E. G., Bullen, M.L., &Hua, W. (2002). Human Resource Accounting: A historical perspective and future ımplications. Management Decisions (ABI/INFORM Global), 40(10).
• Guthrie, J., Petty, R., Yongvanich, K., & Ricceri, F. (2004). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5 (2), 282-293.
• Haniffa, R. M., & Cooke, T. E. (2002). Culture, Corporate Governance and Disclosure in Malaysian Corporations. Abacus, 38(3), 317–349. https://doi.org/10.1111/1467-6281.00112.
• Hejazi, Rezvan, & Fotouhi, Neda. (2009). Simultaneously examine the relationship between organizational strategy, organizational design, and management accounting systems and organizational performance: Contingency fit approach, chemical and pharmaceutical industries and motor vehicles. AL Zahra University, Financial Accounting and Auditing Journal (Spring).
• Hossain, et al. (1995). Financial Management (in Bengali). Angel Publications: Dhaka.
• Hossain, M. (2008). The extent of disclosure in annual reports of banking companies: The case of India. European Journal of Scientific Research,23(4), 659-680.
• Hossain, M. A., (1998). Disclosure of Financial Information in Developing Countries: A comparative study of non-financial companies in India, Pakistan and Bangladesh (Ph.D. Dissertation). School of Accounting and Finance, Victoria University of Manchester, UK.
• Hossain, M. A., Islam, K. S., & Andrew, J. (2006). Corporate Social and Environmental Disclosure in Developing Countries: Evidence from Bangladesh. Asian Pacific Conference on International Accounting Issues, Hawaii, October-2006.
• Hossain, M. S. (2010). Financial Reporting Practices of Listed Pharmaceuticals Companies.
• Hossain, M., Khan, A. R., & Yasmin, I. (2004). ―The nature of voluntary disclosures on human resource in the annual reports of Bangladeshi companies. Dhaka University Journal of Business Studies, 25(1), 221-231.
• Inchausti, B. G. (1997). The Influence of Company Characteristics and Accounting Regulations on Information Disclosed by Spanish Firms. The European Accounting Review, 1(1), 45-68.
• Işık, C. (2013). The importance of creating a competitive advantage and investing in information technology for modern economies: An ARDL test approach from Turkey. Journal of the Knowledge Economy, 4, 387-405. https://doi.org/10.1007/s13132-011-0075-2.
• Işık, C. et al., (2023a). Renewable energy, climate policy uncertainty, industrial production, domestic exports / re-exports, and CO2 emissions in the USA: a SVAR approach, Gondwana Research, https://doi.org/10.1016/j.gr.2023.08.019.
• Işık, C. et al. (2023b). Renewable energy, economic freedom and economic policy uncertainty: New evidence from a dynamic panel threshold analysis for the G-7 and BRIC countries. Stochastic Environmental Research and Risk Assessment, 1-16.
• Islam, H., Rahman, J., Tanchangya, T. & Islam, M. A. (2023). Impact of firms’ size, leverage, and net profit margin on firms’ profitability in the manufacturing sector of Bangladesh: An empirical analysis using GMM estimation. Journal of Ekonomi, 5 (1), 1-9. DOI: 10.58251/ekonomi.1275742.
• Ismail, T. H., (2002). An empirical ınvestigation of factors ınfluencing voluntary disclosure of financial ınformation on the ınternet in the GCC countries, Working Paper Series. Social Sciences Research Network. July 2002. https://doi.org/10.2139/ssrn.420700.
• Kanuf, S. (2011). Human Resources Accounting. Retrieved from www.slideshare.net/humanresourceaccounting.
• Khan, M.H., & Khan, M.R. (2010). Human capital disclosure practices of top Bangladeshi companies. Journal of Human Resource Costing & Accounting, 14(4), 329 – 349.
• Lang, M.H., & Lundholm, R.J. (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research, 31(2), 246-271.
• Owusu-Ansah, S. (1998). The impact of corporate attributes on the extent of mandatory disclosure and reporting by listed companies in Zimbabwe. The International Journal of Accounting, 33(5), 605–631. https://doi.org/10.1016/S0020-7063(98)90015-2.
• Raffourneir, B. (1995). The determinants of voluntary financial disclosure by swiss listed companies. E. Accounting Review, 4(2), 261-280.
• Rahman, A., Islam, H., Rakib. H., & Sarker, N. K. (2020). The effect of management by objectives on performance appraisal and employee satisfaction in commercial banks. European Journal of Business and Management, 32(6), 4-23. DOI:10.7176/EJBM/12-20-02.
• Sackman, S. A., Flamholtz, E. G., & Bullen, M. L. (1989). Human resource accounting; A state-of-the-art review. Accounting Lit., 8, 235-264.
• Silva, W. M., & Christensen T. E., (2004). Determinants of voluntary disclosure of financial information on the internet by Brazilian firms. http://dx.doi.org/10.2139/ssrn.638082.
• Spero, L. (1979). The extent of voluntary disclosure of financial information in three European Capital Markets: An Explanatory Study, Doctoral Dissertation, Harvard University.
• Spiegel, M. M., & Yamori, N. (2004). Determinants of voluntary bank disclosure: Evidence from Japanese shinkin Banks. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.518084.
• Stewart, T.A. (1994). Your company’s most valuable asset. Fortune, 130 (7), 68-69.
• Sutthachai, S., & Cooke, T.E. (2009). An analysis of Thai financial reporting practices and the ımpact of the 1997 economic crisis. ABACUS,45(4). https://doi.org/10.1111/j.1467-6281.2009.00285.x.
• Sveiby, K. E. (1997). The new organizational wealth. San Francisco: Berrett-Koehler.
• Syed, A.M (2009). Human resource accounting disclosure of Bangladeshi companies and its association with corporate characteristics. BRAC University Journal, (1)1, 35-43.
• Ullah, H., Yakub, K. M., & Hossain, M. (2013). Environmental reporting practices in annual report of selected listed companies in Bangladesh. Research Journal of Finance and Accounting.
• Uwalomwa, U. (2011). An Empirical ınvestigation of the association between firms characteristics and corporate social disclosures in the Nigerian financial sector. Journal of Sustainable Development in Africa,13(1). ISSN: 1520-5509, Clarion University of Pennsylvania, Clarion, Pennsylvania.
• Wallace, R. S. O. (1987). Disclosure of accounting ınformation in developing countries: A case study of Nigeria. Doctoral Dissertation, University of Exeter, Devon.
• Wallace, R. S. O., & Naser, K. (1994). Firm specific determinants of the comprehensiveness of mandatory disclosure in the corporate annual reports of firms listed on the stock exchange of Hong Kong. Journal of Accounting and Public Policy, 14(4), 311-368.
• Wiyadi, Meilani, S. E. R., Pertiwi, I, F. P., Trisnawati, R., Abdullah, N. H. (2021). Practices of human resource accounting disclosure: A comparative study across ASEAN countries," Universal Journal of Accounting and Finance, vol. 9, no. 3, pp. 306 -315, 2021. DOI: 10.13189/ujaf.2021.090304.
• Watson, A., Shrives, P., & Marston, C. (2002). Voluntary disclosure of accountıng ratıos In The UK. The British Accounting Review, 34(4), 289–313. https://doi.org/10.1006/bare.2002.0213.