Regulation


Financial return crowdfunding does not pose systemic risks to the world economy yet, according to a report issued by staff researchers working for IOSCO. But in the marketplace, crowdfunding—which is growing in popularity—poses both benefits and risks, according to the report.

Crowdfunding involves the use of small amounts of money from large numbers of individuals or organizations to fund projects or businesses through an online platform.

Researchers focused on what’s known as “financial return crowdfunding,” which consists of peer-to-peer lending and equity crowdfunding. Despite the lack of a systemic risk, these markets pose problems for investor protection that need to be addressed, and regulators worldwide are working to provide oversight for financial return crowdfunding, according to the report.

Benefits of financial return crowdfunding include spreading risk and providing entrepreneurs with a way to raise capital without giving up large parcels of equity interest, the report says. But financial return crowdfunding also poses a high risk of default and investment failure, as well as risks of fraud, cyberattack, and lack of transparency or disclosure. The full report is available at tinyurl.com/mvq8hs8.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.