HUMAN RESOURCE ACCOUNTING: A REVIEW OF THE LITERATURE AND RESEARCH DIRECTION

Abstract

The effective management of human capital has become increasingly imperative in the knowledge-based economy where innovation, creativity, and talent acquisition play pivotal roles in organisational performance. This paper provides a comprehensive overview of human resource accounting (HRA) by highlighting its importance in organisational management and decision-making. The paper discusses the historical evolution and theoretical foundations of HRA and explores various methodologies and measurement techniques employed in the field, including cost-based, market-based, and value-based approaches. It identifies challenges and criticisms associated with HRA, such as measurement issues, subjectivity, and resistance from stakeholders. Furthermore, it outlines potential future directions for research and innovation in HRA which include the development of advanced measurement techniques, cross-disciplinary research, longitudinal studies, comparative studies across industries and countries, and exploration of ethical and social implications.This study concludes that HRA plays a critical role in organisational management and enhance decision-making, strategic planning, and long-term sustainability through effective human capital valuation. The study recommends that organisations and regulatory bodies should work towards establishing standardised measurement techniques and reporting guidelines for HRA. This will enhance comparability across industries and improve the credibility of human capital valuation in financial reporting.