Analysis of Positive Impact of the Variable of Disclosure of Human Resources on the Reputation of the Institution

Through the previous results reached by the various researchers, we see the positive impact of the variable of disclosure of human resources on the reputation of the institution as well as on its image, and these results are related to the idea that the image of the institution is adapted through the perceptions of the various stakeholders, In this way, the institution discloses its commitment to its employees, its intention to increase the confidence of the various interest groups, and its efforts to develop efficiency in order to obtain competitive advantages related to its reputation and innovation. Therefore, the disclosure of human resources is a tool to legitimize, in addition to the image of the institution affected by all issues related to investing in human resources and its management.

2. The effect on the final accounts

Accounting disclosure for human resources involves considering spending on investment in human resources (medium and long-term) as a capital expense, and bearing the final accounts with short-term expenses for human resources divided by the type of short-term expense such as wages, the value of paid leave, health treatment, other expenses and also by the centers that benefit from them, such as production centers, marketing services centers, financial services centers, and final accounts are also beared with annual depreciation premiums for investments in long-term and medium-term human resources, divided into beneficiary centers, and According to the type of investment (attracting - choosing - appointing - formal training - directing - on-the-job training - etc), therefore the net profit number in this case will give a true picture of the results of the business of the institution, as a result of considering the cost of recruitment, qualification and development of human resources as capital expenses and thus capitalized, shown on the budget and depreciated over the useful life of human assets.

The effects of disclosure are reflected on both the income and financial position statements because capitalization of investment in human resources leads to a more objective measurement of both the business result and the financial position, this is the opposite of the case when liquidating this investment, as this carries financial periods with a burden of human resource costs, according to the fact that they occur, away from the concept of accrual, which will lead to a defect in the processes of matching revenue with expenditures.

On the other hand, the treatement of human resource as asset provides quantitative indicators more objective for the purposes of evaluating performance in projects with multiple production divisions, such as the value of the return on investment (ROI) - one of the most used tools in this field - affected by the accounting treatment of invested funds in human resources.

Accounting disclosure for human resources by showing investments in human resources in the financial statements of the company of, leads to a correct and fair expression of the financial position of this company, as these investments are treated accountably, the treatment of the asset in the financial statements, where the value of investments in human resources appears under the item of fixed and intangible assets divided according to the period of benefit from them, whether they are long-term or medium-term, distributed according to the production centers that make up the company at historical cost, and detailed according to their own accounts. The depreciation allowance for the value of investments in human resources is shown under the depreciation allocation divided according to the period of utilization of the value of investments in long term or medium term human resources, and distributed according to the production centers of the conpany and detailed by their own accounts.

Also, the disclosure of the value of human assets in the financial position list provides financial analysts with information on a large part of the importance for the benefit of investment decisions, and when this information becomes available, it is possible to derive a set of financial ratios that are not provided by the traditional accounting lists, and from these ratios

We mention (Alghazwi, 2010):

1. The ratio of human assets to total assets =

• The value of human assets
• The value of total assets

This ratio is used as an indicator to measure the degree of employment concentration in the organization, and then to assess the economic effects of high turnover rates in various industries.

1. The ratio of human assets to non-human assets =

• the value of human assets
• The value of non human assets

It represents the extent of the organization's dependence on or the use of its human resources compared to non-human resources.

1. Ratio of eligible assets=

• The value of highly qualified human assets
• The total value of human assets

It is used as indicator to the scientific skills are concentrated in the organization, and financial analysts use them as an indicator to measure productivity in some industries such as the petrochemical and pharmaceutical industries.

In addition, the inclusion of internal financial reports with information on the monetary value of human assets creates great behavioral effects for individuals, affecting their attitudes, tendencies and incentives, and these effects are reflected in management decisions and aspects of their implementation, for example, the asset turnover rate can be used as an indicator to control the movement of assets, It can also be used to control the additional expenses resulting from the rise in this rate, which is represented in the expenses of replacing the workforce, such as training expenses or losses achieved due to the low rates of production, It also provides appropriate information to evaluate alternatives available in many decisions related to the human resources such as employment decisions, rental decisions, and layoffs, and in the formulation and planning of wage policies, and such information provides them with appropriate data for preparing capital planning budget

3. Impact on enterprise management and decision making

The mangement benefits greatly from human resources accounting, as its information is relevant for it and reduces the uncertainty of the directors (Alsaqer Thamer, 2013), the disclosure of investment in human resources contributes to improving the quality of decisions taken by the various internal and external parties related to the activity of the organization, human resources are a major variable in most of the decisions taken by the mangement, and therefore the representation of this variable in a quantitative form will be more beneficial to the mangement than its representation in a descriptive form, since ignoring the disclosure of investment information in human resources has to make short or long-term decisions that are not correct regarding to many issues, such as the impact on programs to reduce human resource costs through reducing the number of human resources working in the organization to achieve immediate benefits represented in Increasing the current profits at the expense of future profits, which may hide substantial losses greater than the achieved reduction, the survey results showed by Pyle & Likert showed that costs arising from replacing human resources range from three to five times the annual salaries paid(Alghaban Thaer& Yaseen, 2007). In addition, the human resource disclosure helps when conducting the re-engineering of the human institution's resources, where it makes the specialist of the institution aware of the human resources with the skill and expertise to keep them, as it is useful in making the reference comparison, whether at the level of the same institution for different periods or between the institution and other institutions for the same period.

Accounting disclosure of human resources greatly affects the management of the institution and the decisions taken.

It helps in planning, using and controlling these resources, which ultimately leads to achieving the goals of human resources management with the required effectiveness and efficiency.

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c) Determinants of accounting disclosure about human resources

Despite its importance and the heightened calls for it, accounting disclosure of human resources suffers from several problems that prevent it, despite the development of many models of measuring human resource costs, but there is a kind of lack of objectivity in measuring the the cost of it that makes the information provided unreliable (Flamholtz, 2002). Human resource metrics are not being subjective, but they are very relevant to real needs for decision makers and investors, which is considering the most important difficulties in the disclosure of information about human resources, given the inconsistency between the information of reliable financial reports that were measured objectively, and those that are appropriate and relevant for decision-making, and the main reason for this is that the generally accepted principles encourages objective, reliable and verifiable measurement, with a view to comparability with respect to institutions, as it is difficult to compare between institutions if the measures are not characterized by objectivity and a large use of estimates, and on the other hand, the traditional accounting reservation made it difficult for investors to compare human capital investment in institutions and the result is a great deficiency in efficiency of capital markets due to lack of information on this aspect.

On the other hand, we find that there are very few studies that specifically examined the determinants of institutions ’disclosure of human resources, as these disclosures provide information about the importance of human resources in the institution’s strategy, which creates many concerns for the management of the human resources. In this context, Foong (2003) mentioned several obstacles to the disclosure of the institution's human resources, stating that information based on human capital is not something that can be shared externally1, it has provided two important details on the reason that this information cannot be shared externally, and in the following form we summarize these two details.

1. The first of these details is that such information may give an important idea to competitors, which leads to concerns about the disclosure of this information externally 2, some of this information express sources of competitive advantage, and therefore it will not be relevant to include them in external reports, disclosures about the human resources of external parties represent abandonment of sources of competitive advantage, as human resources are important component in acheiveing it .
2. The second detail about the determinants that prevent the disclosure of human resources, is that such the disclosures are likely to be interpreted negatively by external stakeholders such as unions and employees in general, this indicates the possibility that providing information regarding the importance of human capital, and institution employees in some way, may lead to undesirable consequences, as this information may support unions and bargaining workers for better wages, because this information makes employees are more aware of their importance to organizations.

Also, when such information is not disclosed externally, unions and employees may are willing to accept lower wages, because they are still unaware of their importance to the institution.

Understanding and researching these determinants helps policymakers and accounting regulators to formulate international accounting standards that take into account the forces currently hindering disclosures on human resources, which leads to the strengthening of this type of disclosure, and help in issuing international effective accounting standards, which in turn leads to efficient allocation of resources in boosting the economy and the of economic strength.

C. Human Resources Accounting Information System(HRAIS)

As mentioned above, accounting is a system to provide the information that different parties need In particular, investors, lenders, workers, and dealers with the company, human resources represent all workers in the conpany and their different levels of management, the human resources accounting information system is a Pairing between the two information systems of accounting and human resource management.

1. The concept of Human Resources Accounting Information System and its objectives

The human resources accounting information system is considered an information system that was developed to carry out treatments of accounting for human resources, and we will describe in detail below the concept of this system and its components.

• a) The concept of human resource accounting information system

The need for the human resources accounting information system in institutions increases whenever there is a large number of economic operations that require highly trained and efficient skills, the HR Accounting Information System is one of the subsystems within the accounting information system, as it works to provide all historical, current and future information, financial and non-financial, related to human resources, and provide them to all sides of concern to the matter of those resources and in order to achieve the desired goal (Shendakh, 2010).

The HRAIS is caring about all data linked to human resources, by collecting them from its various sources and then operating them according to certain accounting principles and rules according to the extent of the need for the information that can be produced, which is communicated to the bodies that have interests in these resources.

The design of a human resource accounting information system contributes to measuring and analyzing the value of human resources financially, in addition to contributing to planning those resources at the level of the economic unit as well as at the national level, by contributing to the formulation of employment and employment policies and related to organizing migration, wages, promotions and incentives and that is done scientifically.

• b) Human Resources Accounting Information System goals

The Human Resources Accounting Information System is designed to achieve a set of goals (Shendakh,2010):

1. Collecting data on human resources, such as the data of the persons working in the organaiazation, their qualifications, financial grades and responsibilities, the wages paid to them and the costs of training operations and scholarships.
2. Classifying data related to the human resources that work in the comapany, such as scheduling the costs of work force in the company into wages, training costs, test costs, etc.
3. Communicating information related to human resources to internal and external parties of interest to this information in a timely manner and with the required accuracy.
4. The use of the outputs by its users and achieving the desired benefit from it in making various decisions.

2. Human Resource Management / Accounting Information System Integration

An integrated information system is a system whose subsystems complement each other through their work in a coordinated and reciprocal manner so that the frequency of generating information is excluded from more than one sub-system, and this leads to a reduction in the costs of producing the information necessary for the various entities, as well as reducing the effort and time required for it (Rasheed, 2007).

due to the complexity and multiplicity of relations between both the accounting information system and the management information system, as we mentioned before, there are researchers and writers who think that the accounting information system is a subsystem within the management information system, and on the contrary, there are those who see it as an independent system in itself and that it represents the basic and important pillar for other information systems in the economic unit. Regardless of these differences, which focus on the conceptual aspect in a significant way, what concerns us in this regard is that the institution can be seen as representing an integrated information system that includes both the accounting information system with all its subsidiary systems - including the human resource accounting information system, the management information system - including the human resources management information system, considering that the integrated system is the system whose sub-systems complement each other, there is a need to integrate both the accounting information system and the management information system, and by dropping to their sub-systems we find that there is a need for integration between human resources accounting information system as a sub-system of accounting information system in the economic unit, and the system of human resources management information, as a sub-system within the Management Information System in the institution.

So we can say that the integration of the human resources accounting information system and the human resources management information system will refer to 'the system that works through the integration of both the accounting information system and the management information system through coordination between their work and the exchange of data and information that arises from each of them according to a rule consolidated data to reduce the costs of producing targeted information, as well as reduce the time and effort needed for it '(Shendakh, 2010). Also, HRMIS can be a more effective system if it is integrated with the human resource accounting information system, which leads to achieve the overall goal of economic unity with regard to human resources, through the following (Shendakh, 2010) :

1. HRAIS can express a financial quantitative picture of all the data and information that the human resources information system can provide so that it has a greater explanatory ability when it is used decision-makersers, whether inside or outside the economic unit.
2. The production of a lot of information about human resources through the accounting information system directly related to human resources, will contribute to reducing the effort that can be made in preparing the necessary data and information, in addition to reducing the costs that can be spent in collecting and analyzing data, and then producing information of them, with the possibility of providing them in a timely manner without waiting for them to be obtained by the Human Resources Management Information System first, which leads to reduced duplication in the work of the two systems.