A method of accounting is responsible for taking into consideration the chief decision makers as an integral part of a company. In order to make the impacts of behaviour transparent to the current and potential stakeholders, behavioural accounting was developed. It was because of understanding the effects of opinions, business process and human variable has on the overall value of the corporation in the future and in present that this was introduced.
On the other hand, Human resource accounting is the procedure of identification and reporting of the investments which are made in the Human resource department of a firm which in the conventional accounting practices are not accounted for. Behavioural accounting is also known as human resource accounting (Brummet, 1968). For instance, in the current business scenario behavioural or human accounting has become one of the essential parts of any business organization and is commonly observable.
As a result of the industrial production in the 19th century, the need of the cost accounting came into existence. Also, it was all throughout the middle of the 20th century that the corporations started to make huge investments in the equipments, factories and natural resources. Managerial accounting was basically the cost accounting, during this time period. The rapid growth of the financial institutions and the growth of the service industry also contributed to the changes in the environment in which accounting existed in the starting of the 1960s (Ittner & Larcker, 1998). Moreover, it was during this time when managerial accounting started to mean more than just cost accounting. The development of the field of behavioural accounting came into existence along with this change, this was because of the fact that more scholars started to observe that accounting had a major behavioural impact.