Post on 10-Apr-2018
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IN THE NAME OF ALLAH,
THE MOST MERCIFUL,
THE MOST
BENEFICIENT
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GROUP BGroup Members:
Muhammad Ahmad (Group Leader)
Nadia Shoukat
Saqib
Sadaf
Muhammad Shahid
Ehsaan Elahi Zaheer
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HUMAN RESOURCE
ACCOUNTING
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Introduction To HRA The most valuable of all capital is that invested
in human beings.
- Alfred Marshall
An attempt to identify and allocate investment
made in the human resources.
An information system reporting the cost and
value of the human factor to the organization.
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Characteristics OfHRA
Its system of accounting in which identification of
human resources is made.
Investment made in human resources is recorded.
Measurement of costs and values are made.
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Characteristics ofHRA
Helps the management to gain knowledge of the
various aspects of employees.
Changes occurring in human resources over a
period of time are also recorded.
Communicates information through financial
statements to interested parties.
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History
First Stage(1960-66)
Second Stage(1966-71)
Third Stage(1971-76)
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History
Forth Stage(1977-80)
Fifth Stage(1980-Onwards)
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Objectives OfHRA
Proper management of human resources
Provides a sound and effective basis of human asset
control.
Improvement of human resources.
Depicting the true value of the organization.
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Objectives OfHRA Provides quantitative information on human
resources,helping managers and investors inmaking decisions.
It allows management personnel to monitoreffectively the use of human Resources.
Communicates the worth of human resources tothe organization and to the public.
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Methods/Models OfHRA Historical Cost Method:
Actual cost incurred for recruiting, hiring,training and developing the human resources of
the organization are capitalized and amortized
over the expected useful life of the humanresources.
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Methods/Models OfHRAReplacement Cost Method:
This is the measure of the cost to replace a
firms existing human resources.
This method has the advantages of adjusting the
human value of price trends in the economy.
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Methods/Models OfHRAOpportunity Cost Method:
Human resource of an organization has to
be valued on the basis of the economists
concept of opportunity cost .
It is value of benefit foregone by putting it
to present use.
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HRA- A Challenge To HRM
Encouraged HR professionals towards
strategic and business focused approach inmanaging their human capital.
Knowledge based organizations to valueand invest significantly in human capital.
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CREATIVEACCOUNTING
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Introduction What is Creative Accounting
It is process of using the rules, theflexibility provided by them.
This flexibility is helpful in financialomissions ,financial statements
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Continuing
Also called Aggressive Accounting.
Major purpose is the manipulation offinancial numbers .
Assets and liabilities may also bemanipulated.
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Purpose It is a snapshot of the company situation
Accounting techniques may be used toproduce more meaningful figures and avoidunjustified market pessimism.
Helps Auditors to distinguish fraud fromerror by identifying the presence of intention.
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Why Creative Accounting
More Profit Less Profit
More Assets Fewer Assets
More Liabilities Fewer Liabilities
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Creative Accounting Practices
Income smoothing
Changing Accounting Principles
Overstating Cost
Expenses into assets
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More in Creative Accounting Inflating profits and EPS
Reporting Profits without generating
equivalent cash.
Reporting lower borrowing
Off balance sheet financing
Foreign exchange rates effecting values of
Assets.
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SOCIAL ACCOUNTING
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Social Accounting Introduction
Social accounting as an approach begandeveloping in the UK in the early 1970s.
A way of demonstrating the extent to whichan organisation is meeting its stated social orethical goals .
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Evolution Early developed in UK.
NEF (Pioneered of Social Accounting)
SEAAR.
ISEA
AA 1000
AA 1000 S
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Conclusions In the corporate world,social accounting is
one of the first major stepping stones in
improvements in corporate socialresponsibility.
Social accounting has given new face to
accounting.
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Continuing It is helpful As more organisations involved in
the field of enterprise development
experiment with social and ethical accounting,auditing and reporting.
The concept of social accounting is growing
in recognition and sophistication
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