HUMAN RESOURCE

ACCOUNTING

INC
GUNTUR
PUTTU GURU PRASAD
Need for H R A
With the growing emergence of the “knowledge
economy” the traditional valuation has been called into
question due to the recognition that human capital is an
increasingly important part of an enterprise total value.
This has led to two important questions
 How to assess the value of human capital in addition to
an enterprise tangible assets and
 How to improve the development of human capital in
enterprise
 It is an extension of the accounting principles of
matching cost and revenues and of organizing data o
communicate relevant information in financial terms
 It can be used as a information tool for internal/external
use(for emp,cust,invstr)and as a decision making tool for
HRM
Approaches to HRA
The American accounting
association committee has defined
HRA is the Process of identifying
and measuring data about human
resources and communicating this
information to interested parties to
facilitate effective management
with in the organization
The aspects of HRA
Valuation of human resource
Recording the valuation in the
books of acconunts
Presenting the information ion the
financeial statements of
communication
Valuation of HR
Historical cost approach
Replacement cost approach
Opportunity cost approach
Standard cost approach
Present value approach
Net benefit model
Reward valuation approach
Total cost concept
Aggregate payment approach
Importance of HRA
 It helps in decision making in he following
matters
 Employment , locating and utilization of human
resources
 Transfers, promotions, training and
retrenchment of human resources
 Planning of physical assets vis-à-vis human
resources
 Identifying the causes for high turnover at
various levels and taking preventive measures
to contain it
 Locating the real cause of low return on
investment
 It helps individuals employees in improving
HRA in India
In view of growing importance of
HRA many companies in India
voluntarily giving information about
their human resources like BHEL,
SAIL, MMTC, NTPC, ONGC, EIL
Assumption underlying HRA
 People are valuable organizational resources
capable of providing present and future
services to the organization and such future
services have economic value to the
organization and can be measured
 The information relating to the human resource
would facilitate various management decisions
on acquisition ,compensation, training and
development
FORENSIC
ACCOUNTNG
INC
GUNTUR
PUTTU GURU PRASAD
Forensic Accounting
Forensic accounting also known as
investigative accounting and is
combination of accounting
,auditing and instigative skills . It
provides accounting analysis that
will be suitable to the court to form
a basis of discussion to arrive at a
solution of the dispute
Larger accounting firms as well as
medium sized firms have
professional forensic accounting
departments. They specialize in
insurance claims, fraud,
construction or royalty audits
Difference between auditing and forensic
accounting

An auditor does the review of accounts

and jumps into investigation only
when a doubt arises where as a forensic
accountant starts the wok with
investigation
An auditor’s duty ends with the
submission of a report what went wrong
where as a forensic accountant also as
to see how it can be undone
An auditor’s role is of a verifier where
as forensic accountant's role is of a
 Difference between auditing and forensic
accounting
Detection of fraud is the secondary objective
of auditing where as forensic accounting
alleges detection into detail of spending,
recording etc
Auditor detects the frauds and reports it
where as forensic accountant detects the
fraud , conducts investigation and decodes
the financial angle of the crime for analysis
suitable to the court which will lead to
dispute resolution
Auditors never use the tools of statistical
and computer aided techniques to arrive at
A person dealing as forensic
accountant shall posses not only
the broad knowledge of accounting
principles , practice and standards
but also the knowledge of
insurance, banking civil and
criminal law and human
psychology.
Branches of forensic accounting
Investigative accounting- it deals with
investigation of criminal matters relating to
employee theft, securities fraud, insurance
fraud etc. it does not end with investigation but
also includes provisions of suggestions
regarding possible courses of action
Litigation Support- it involves providing
accounting assistance in litigation matters. It
primarily deals with quantification of economic
damage
Steps invoked in forensic
accounting
Recognition of the problem
Flow chart is prepared as how to go
about
Collecting the evidence relevant to the
problem
Evaluation of summarization of the
evidence by various statistical and
computer aided techniques
Preparation and submission of report
Application of forensic accounting
The application of forensic
accounting can be better
understood by the following case
let: it is brought to the notice of the
auditor by an employee that the
manager misuses his right of
reimbursement of bill on official
tours by submitting fake bills and
making money around Rs.50,000 a
year