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Crafting Balanced Regulations for Decentralized Finance: Comparative Analysis and Policy Recommendations
Makhamadkhujaeva Munisakhon Nematkhujaevna
Issue:
Volume 8, Issue 4, December 2023
Pages:
89-93
Received:
Sep. 18, 2023
Accepted:
Oct. 05, 2023
Published:
Oct. 14, 2023
Abstract: Decentralized finance (DeFi) built on public blockchain technology has introduced groundbreaking financial innovation through disintermediated peer-to-peer transactional architectures. By eliminating centralized intermediaries, DeFi expands access to an open ecosystem of decentralized financial services including lending, trading, derivatives, insurance, savings, asset management, crowdfunding and more. However, DeFi's disruptive nature also introduces significant regulatory challenges worldwide. Most DeFi platforms operate autonomously outside existing policy frameworks crafted around regulated entities in traditional finance. The pseudo-anonymous execution of transactions via non-custodial wallets and smart contracts risks enabling illicit activities like money laundering at unprecedented scale. Furthermore, the complexity of cross-border DeFi structures stresses traditional financial oversight dependent on fragmented national regimes. As innovation continues outpacing governance adaptation, regulators across jurisdictions grapple with crafting balanced oversight solutions without constraining beneficial advancement. This paper undertakes a comparative legal analysis of emerging legislative approaches to governing Decentralized finance (DeFi) across major developed and developing economies. It examines key tensions between DeFi's unique technical architecture and regulations designed around centralized intermediaries. Challenges are identified in combating illicit finance, protecting consumers, ensuring stability and promoting fair competition in the rapidly evolving DeFi ecosystem. The analysis assesses risks including money laundering, investor protection, systemic threats and blockchain immutability. It also reviews regulatory initiatives and debates involving global standard-setters and national authorities in jurisdictions like the United States, European Union, China, Singapore, Switzerland and United Arab Emirates. While most countries remain at early stages of tailored DeFi governance, recommendations are presented on crafting international regulatory strategies and oversight coalitions to harness DeFi’s opportunities while safeguarding public interests. Promising policy directions include regulating activities over entities, proactive developer engagement, leveraging regulatory technologies, incentivizing accountability, enabling pilot programs, and nurturing open-source collaboration. With prudent regulatory modernization centered on multi-stakeholder collaboration and industry consultation, DeFi has the potential to fulfill its promise of expanding financial access, efficiency and resiliency for the benefit of economies and communities worldwide.
Abstract: Decentralized finance (DeFi) built on public blockchain technology has introduced groundbreaking financial innovation through disintermediated peer-to-peer transactional architectures. By eliminating centralized intermediaries, DeFi expands access to an open ecosystem of decentralized financial services including lending, trading, derivatives, insu...
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Research Article
Relational Capital Disclosure and Market Value of Selected Quoted Companies in Nigeria
Justin Iorakpen Iorun,
Emmanuel Igbawase Abanyam,
Michael Iorlaha
Issue:
Volume 8, Issue 4, December 2023
Pages:
94-103
Received:
Aug. 28, 2023
Accepted:
Oct. 08, 2023
Published:
Oct. 28, 2023
DOI:
10.11648/j.ijafrm.20230804.12
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Abstract: This paper examined the relationship between relational capital disclosure and market value of selected quoted companies in Nigeria. Specifically, the study examined the relationship between customer service, distribution channels, strategic partnerships disclosure and market value. Ex-post facto design was employed as data were extracted from published audited annual financial reports of 32 sampled listed companies on the Nigerian Exchange Group for a period of ten (10) years covering 2013-2022. A disclosure checklist was adapted and modified in collecting data for the independent variables (customer service, distribution channels and strategic partnerships disclosure). Summary statistics was conducted to estimate mean, deviation, minimum and maximum values of the collected data. The data collected were also subjected to multicollinearity test via correlational matrix. Regression post estimation was conducted with the aid of heteroskedasticity test. Panel data analysis was employed and multiple regression analysis was conducted in which random effect model was found most appropriate to test the formulated hypotheses. The study found that customer service disclosure has negative and insignificant relationship with market value, while distribution channels and strategic partnership disclosure were found to have positive significant effects on market value. Therefore, the study recommends amongst others that relevant stakeholders should give maximum attention to distribution channels and strategic partnerships disclosure and make them mandatory disclosure requirement, while caution be taken on customer service disclosure and its disclosure should be voluntary in nature.
Abstract: This paper examined the relationship between relational capital disclosure and market value of selected quoted companies in Nigeria. Specifically, the study examined the relationship between customer service, distribution channels, strategic partnerships disclosure and market value. Ex-post facto design was employed as data were extracted from publ...
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Research Article
Assets Impairment Disclosure (IAS 36) and Real Earnings Management Practices of Listed Consumer Goods Companies in Nigeria
Abimbola Abosede Joshua,
Olubunmi Alao,
Rafiu Oyesola Salawu,
Oludele Emmanuel Ige
Issue:
Volume 8, Issue 4, December 2023
Pages:
104-112
Received:
Oct. 03, 2023
Accepted:
Nov. 06, 2023
Published:
Nov. 29, 2023
DOI:
10.11648/j.ijafrm.20230804.13
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Abstract: The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sample size. The study covered the period of eleven years (2010-2020). The independent variable includes the recognition of assets impairment proxied by 1 if recognised and 0 if otherwise while the dependent variable includes the real activities of earnings management proxied by operational abnormal cashflows with the control variables such as the firms’ size, firms age and ROA. Data were extracted from the financial report of the companies under consideration and analysed using the panel least square of regression analysis with the aid of E-views statistical tool. The findings of the study revealed a positive but insignificant effect of assets impairment disclosure on the real earnings management with coefficient value of 0.178012, t = 0.345786, p-value = 0.7298 > 0.05. Firms’ size indicated a negative and insignificant effect with r = -0.046184, t = -0.466285 and p-value = 0.6414 > 0.05. Firms’ age indicated also a negative and statistically insignificant effect with r = -0.017032, t = -0.02232 and p-value = 0.9822 > 0.05 while ROA indicated a positive and statistically significant effect at r = 0.0422, t = 2.2809 and p-value = 0.0233 < 0.05. The study recommended that accounting standards should be reviewed and updated so as to give a lesser opportunity for income smoothing and thereby enhance quality financial reporting system.
Abstract: The study determined the effects of assets impairment disclosure on the real earnings management practices of the listed consumers’ goods companies in Nigeria. The population of the study comprises the 28 listed consumer goods companies on the Nigeria Stock Exchange and the census technique of sampling was adopted in which the population is the sam...
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Research Article
The Influence of the Audit Committee Characteristics on Fraudulent Financial Reporting
Issue:
Volume 8, Issue 4, December 2023
Pages:
113-122
Received:
Oct. 17, 2023
Accepted:
Nov. 21, 2023
Published:
Nov. 29, 2023
DOI:
10.11648/j.ijafrm.20230804.14
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Abstract: This research explores the impact of audit committee characteristics on potential fraudulent financial reporting, focusing on independence, financial expertise, and tenure. The study utilizes the Beneish M-score index to identify fraudulent financial reporting in manufacturing firms listed on the Indonesia Stock Exchange (IDX) between 2018 and 2021, employing purposive sampling for sample selection. The analysis employs Partial Least Squares (PLS) statistical tools. The results of the study reveal that both independence and tenure of the audit committee significantly influence the occurrence of financial reporting fraud. However, financial expertise within the audit committee does not exhibit a significant impact on fraudulent financial reporting. These findings underscore the importance of an independent audit committee and its tenure in safeguarding against fraudulent financial reporting. Investors are advised to carefully examine the presence of an independent audit committee when assessing potential investments. The research suggests that a robust audit committee, characterized by independence and a longer tenure, plays a pivotal role in mitigating the risks associated with financial reporting fraud. Furthermore, the study recommends a periodic reassessment of corporate governance practices as a prudent step before making investment decisions in a company. This research contributes valuable insights to the ongoing discourse on corporate governance and financial reporting integrity in the context of manufacturing firms on the IDX.
Abstract: This research explores the impact of audit committee characteristics on potential fraudulent financial reporting, focusing on independence, financial expertise, and tenure. The study utilizes the Beneish M-score index to identify fraudulent financial reporting in manufacturing firms listed on the Indonesia Stock Exchange (IDX) between 2018 and 2021...
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Research Article
Risk Management of Foreign Direct Investment: The COVID-19 Crisis Experience
Issue:
Volume 8, Issue 4, December 2023
Pages:
123-133
Received:
Nov. 03, 2023
Accepted:
Nov. 27, 2023
Published:
Dec. 06, 2023
DOI:
10.11648/j.ijafrm.20230804.15
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Abstract: The purpose of this study is to develop a methodology for analyzing corporate investment risk in the context of the impact of the COVID-19 pandemic. The research methodology is based on the use of regression analysis and scenario modeling of pandemic investment leverage. The contribution of this study is the proposed methodological approach to assessing investment risks in the context of the spread of coronavirus. Regression analysis made it possible to establish the existence of a sufficient relationship between foreign direct investment (FDI) in the studied countries and the level of pandemic investment leverage. This is the result of the stabilization in FDI sector and confirms the effectiveness of the studied countries in a given direction in the context of a pandemic.
Abstract: The purpose of this study is to develop a methodology for analyzing corporate investment risk in the context of the impact of the COVID-19 pandemic. The research methodology is based on the use of regression analysis and scenario modeling of pandemic investment leverage. The contribution of this study is the proposed methodological approach to asse...
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