Human resource auditing as a tool of human resource valuation: interface and emerging practices

The human resource valuation system cannot be considered to be a complete system of accounting unless it is followed by an equally competent system of auditing. Application or use of human resource accounting, therefore, must also be followed by a separate HR audit to ascertain whether or not the performance of the managers has been true and fair in the overall interests of the organization they serve. The application and usefulness of human resource valuation depends on the future efforts and experiments to be made by practising managers, accountants and academicians. It also needs support from the professional bodies and government. In the absence of human resource valuation, the management may not realize the negative effects of certain programmes aimed at improving profits in the short run. Such programmes may result in decreased value of human assets due to a fall in productivity levels, high labour turnover and low morale. Audit of human resources could help in finding out the efficiency of every segment. Human resource audit could enable the appraisal of the performance of various managers. The basic function and management of human resources is also greatly facilitated. Hence human resource valuation and audit activity could be helpful in improving the efficiency of human resources in the changing business scenario.