GIPS: Firm failing verification still claiming compliance? tedious, failing, studying, anything

king_kong

Just finishing the tedious reding on GIPS and it got me wondering whether a firm that fails independent verification (for obvious reasons) will still be able to claim compliance with GIPS. As I see it, if the compliance could not be verified thare is no compliance. The books do not say anything about this.

These are the things that keep my mind busy on a lonely Sunday studying.

Analyze_This

Its true, you have to disclose it if you haven't been verified. CFAI volume 6, page 308

Darien

Well now there are two ways to claim compliance. If you are not verified, you still have to state that you are NOT independently verified. I think that's something new as I don't remember it from before.

Iginla2011

I don't think thats right either... i don't remember you having to say anything if you aren't verified and haven't sought to be. It's not mandatory anyhow.

zwjy

I don't think this is correct Jan, i don't have the text in front of me but i'm pretty sure i remember thinking to myself "man, there is no real upside to doing this" .... because it seemed like if you fail verification you can't claim compliance till remedied, so why would anyone do it?

Unforseen

You are right , it would be simpler to just not claim compliance , get things fixed , then try for compliance

Windjammer

You can still claim compliance.

You can say the claim was verified by so-and-so, and the verification report is available upon request.

It is up to the investor to go thru the report and see you are not compliant at all. Caveat emptor.

pennyless

but the claim of compliance in this case wasn't verified. this seems like a scenario that when verification is sought it should be binding.

bpdulog

Verifying your firm's compliance to GIPS, is a recommendation of GIPS.

lcw77

"a firm that fails independent verification (for obvious reasons) will still be able to claim compliance with GIPS"

I believe the verifying firm would provide them with a list of why they did not comply and were not verified, then they get a chance to fix the stuff and try again no?