Purpose The purpose of this paper is to investigate the impact of agency risk implied in case of personal debt obtained by promoters through pledging of their stock on accrual and real earnings management practices. Design/methodology/approach In this paper abnormal accruals, as suggested in Dechow et al. (1995), and the real earnings management proxies as indicated in Dechow et al. (1998) and Roychowdhury (2006) are used. OLS regression is run over 29,054 firm-years of Indian companies starting from the year 2008 to 2016. Then the occurrence of earnings management is tested in firms in year t where promoters pledge/release their holdings from the pledge in year t+1. Findings The findings suggest that earnings management increases in the prior year with an increase in the proportion of promoters’ stock pledge in the subsequent year. The authors find evidence for increased earnings management through accruals and also for real earnings management using abnormal cash flows and abnormal discretionary expenses. However, the authors do not find real earnings management using abnormal production cost as a measure. Practical implications The paper has considerable implications on managerial behavior toward earnings management because of the flexibility managers have in applying accounting policies and authority in operating decisions under domestic GAAP, and IFRS and earnings are prone to management tactics, fostering agency risk when they relate to the welfare of decision makers. Originality/value This paper addresses the consequences of individual borrowing of promoters collateralized by their stake in the firm, which is a global phenomenon, on reporting quality.

Purpose -The purpose of this paper is to develop material for classroom teaching in the subject area of general management with retail industry focus. Design/methodology/approach -The approach is a case study approach with an emphasis on building relevant issues for class discussions and providing opportunities for students to analyse using additional resources from the library, company web site and news paper articles. Findings -The case research enabled us to understand the challenges faced by organised retail companies in Indian subcontinent with reference to logistics and sourcing. Organised retail is an emerging industry in India and it provides an interesting analysis for growth and entrepreneurial ventures. The case research also provided important insights into growth of retail industry, extent of consolidation happening within the industry due to the unorganised retail industry players aligning themselves as out sourcing partners for major retailers, etc. To this extent, there is scope for further research in this area of research. Research limitations/implications -There are issues related to ethical practices in sourcing. This issue did not probe into this aspect of the retail industry. Originality/value -This case is originally developed by conducting interviews with company officials and collecting information using qualitative approach. The details provided are true to the timeline given in the case -2011 in Indian setting -Mumbai.

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