Understanding Verification in GIPS

Hard Global Investment Performance Standards Verification

As an investment manager, you are preparing to present your performance results in compliance with the Global Investment Performance Standards (GIPS). For your firm to claim compliance with GIPS, it must undertake a process known as verification. This process can be performed by an external verifier who assesses whether the firm’s processes and performance measurements can be confirmed as being in accordance with the GIPS standards.

Which of the following statements best describes the verification process under GIPS?

Verification ensures that the firm has managed performance claims according to GIPS but does not require scrutiny of the underlying data.

Verification requires that the verifier examines whether the firm’s investment performance data is consistent with GIPS standards through an examination of the firm's processes and the underlying data.

Verification is only necessary if the firm makes a performance claim to prospective clients.

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