GIPS Compliance and Ethical Reporting

As an investment firm, XYZ Investments claims to comply with the Global Investment Performance Standards (GIPS) to enhance transparency and integrity in reporting performance. GIPS compliance mandates strict adherence to ethical and standardized guidelines that improve the credibility of performance results.

When preparing a GIPS-compliant performance report, XYZ Investments must ensure that their policies and procedures align with these standards. A recent review of their compliance process indicated a discrepancy in how they account for certain investment returns, resulting in underreporting of performance. Despite this issue, XYZ Investments chose to present the performance results to clients without correcting the accounting discrepancy.

In the context of GIPS compliance, which of the following actions should XYZ Investments take to align its practices with ethical standards?