PurposeGiven the unique nature of Indian family firms and the recent failure of many business houses (Bhushan Steel Ltd., Hotel Leela Ventures Ltd. etc.) it is important to understand the relationship between the earnings management practices of the family firms and the debt. In this paper an attempt towards this has been made.Design/methodology/approachThis study makes use of an empirical approach to understand the relationship between earnings management and debt in the Indian context. This study was conducted by considering a large sample data of 16,629 family firm years spread across nine years. This study makes use of fixed effects and Generalized Method of Moments (GMM) regressions to test our hypothesis.FindingsFirst and foremost, this research supports the socioemotional wealth theory. It indicates that maintaining the control of the business is one of the socioemotional factors for the Indian family business and Indian family businesses ladened with debt engage in earnings management to protect their socio emotional wealth (control of the business). Evidence for higher earnings management practices for firms with above average debt has also been documented. Further, the fact that real activity earnings management is the preferred earnings management choice over the accrual-based earnings management as majority of debt is from the banks and financial institutions has also been demonstrated. Finally, the analysis indicates that accrual-based earnings management and real activity earnings management are complementary to each other. However, real activity earnings management can also act as a substitute for the accrual-based earnings management but the reverse is not true. Even among the real activity earnings management, cost-based real activity earnings management was preferred over the revenue-based real activity earnings management as the former is more elusory.Research limitations/implicationsThis research is limited to the listed family firms of India. Since the family firms around the world are heterogeneous the findings from this research might not be extended to other economies.Practical implicationsThe study has meaningful insights for policy making and monitoring of the family firms. It also aides the investors in taking investment decisions with respect to family firms in India.Originality/valueThe study is unique as it integrates the family firms, debt and various types earnings management. Previous studies have focused mainly on accrual-based earnings management. The study also provides insights on the relationship between earnings management practices and debt covenants at various levels of family holdings.

An attempt has been made through this paper to understand the various theoritical models that have been developed to address the transfer pricng complexities and the empirical studies that have been made to understadn the transfer pricing practices in the MNEs over the last six decades. Though the concept of transfer pricng in the modern times can be traced back to early '40s, the models have been developed mostly during the '70s and '80s. The empirical studies started almost from that time as it was practically extremely difficult to adopt any specific model as a transfer pricing problem solving tool. This study has reviewd the literature from both the aspectstheoritical and empirical. The objective of the study is to findout the scope for further study in this field.

Like many other regulations, which have been enacted to develop a control mechanism, the corporate governance rules, regulations and guidelines have come into fore to regulate, if not control, the corporate misdeeds/misdealings. Be it the boardroom fight or the CEO and CFO conievance or the management-auditor hand in glove story, each has lead to some corporate fraud or disruption. In this preocess, the biggest loser has been the investor, who ultimately bears the burnt of the mismanagement or deficit in governance of the corporate affairs. This is a global phenomena and India being a part of the global economy, also suffers from such deficits.There are many regulations in the international scenario. The most important ones are the OECD guidelines, SOX of USA, Cadbury Committee report of UK. In India SEBI has formulated many rules including the listing agreement under clause 49 based on the recommendations of different committees. Through this study an attempt has been made to understand how the framework has evolved over a period of time in India and how many of the large sized accounting frauds have taken place due to poor Corporate governance mechanism in place.