HUMAN RESOURCE COST AND FINANCIAL REPORTING QUALITY OF QUOTED BANKS IN NIGERIA

Abstract

This study examined human resource cost and the quality of financial report of commercial banks in Nigeria. The general objective was to examine if human resource cost on quality of financial of financial report while the specific objective is to examine the effect of wages and salaries, employee development cost, employee benefit cost and human resource acquisition. Cross sectional data was sourced from financial statement of fifteen   quoted bank value relevance  of financial reporting, timeliness  of financial reporting and comparability of financial report was used as dependent variable  while wages and salaries, employee development cost, employee benefit cost and human resource  acquisition. Ordinary least square method of cointgration, unit root and granger causality test was used to determine the extent to which human resource cost affect quality of financial report. After cross examination of the validity of the pooled effect, fixed effect and the random effect, the study accepts the fixed effect model. Model I found that the independent variable explains 77 % and 74 % variation on the dependent variable. The F-statistics and the F-Probability validates that the model is significant.  The Durbin Watson statistics of 0.9004 found that the presence of serial autocorrelation. The β coefficient of the variables shows that wages and salaries have negative effect while employee benefit cost, development cost and acquisition cost have positive effect on timeliness of financial reports. The T-Statistics and the probability value justify that the variables are statistically significant. Model II found that the independent variable explains 72 % and 50.7 % variation on the dependent variable. The F-statistics and the F-Probability validates that the model is significant.  The Durbin Watson statistics of 2.141 found that the presence of serial autocorrelation. The β coefficient shows that salaries and wages and employee development cost have positive effect on the dependent variables while human resource acquisition cost and benefit cost have negative effect timeliness of financial reports. The t- statistics and probability found that the independent variables are statistically not significant. Model III found that the independent variable explains 58 % and 549 % variation on the dependent variable. The F-statistics and the F-Probability validates that the model is significant.  The Durbin Watson statistics of 1.573 found that the presence of serial autocorrelation. The β coefficient shows that all the independent variable has positive effect on timeliness of financial reports except human resource acquisition cost. The t- statistics and probability found that development and benefit cost are significant while acquisition and wages and salaries are not significant. we recommend that Commercial banks should embark on employee development and career management programs to assist their employees in career planning and cost.  Commercial banks should   increase wages and salaries of employees and management should be able to realize a return on investment.