Claiming GIPS compliance additional, management, question, because, forward

thisisbrianly

A is a definite other are minimum requirements. like in B it can carry on for more then 3 years as well.

seems tricky !!

hinsafdar

Another ethics question:

A money management firm has been in existence for seven years. In order to be GIPS compliant..

a) it's records must go back tot he inception of the firm

b) it's records must go back to the inception of the firm and carry forward three more years

c) it's records must go back five years and carry forward an additional five years


well, the answer is "A", which is true because to claim GIPS compliance, if you go back to the inception of the firm bingo bango you got it. HOWEVER, both the methods in "B" and "C" are correct, being bo back 7 then forward 3, or back 5 forward 5. You have to go back 5 at a minimum, and then forward so that 10 years are covered (back 5, forward 5, back 4, forward 6 etc) Why are "B" and "C" wrong? Is it becuase it says they "MUST" do this, when in reality they "MAY" do something else? or is it because the question is worded in a way that the firm wants to claim GIPS compliance TODAY, this second, in which case the only way they could do that would be to go back to inception.

Please provide thoughts.

MB

bapswarrior

don't be ashamed . It is a borderline insane question involving 2+2 kind of math , not really a test of GIPS knowledge. I was fooled exactly like you.