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Subject 4. Verification PDF Download
Verification refers to the independent review of a firm's performance measurement processes and procedures. Verification applies to the firm as a whole, not to individual composites.

Verification tests:

  • Whether the firm has complied with GIPS composite construction requirements on a firm-wide basis.
  • Whether the firm's processes and procedures are designed to calculate and present GIPS-compliant performance results.

Again, the focus of verification is not on individual composites, but on the processes the firm follows to form composites and calculate and report performance.

At this point, verification is not mandatory, but it is strongly recommended. Firms may claim compliance, but independently-verified compliance adds credibility to those claims. It is recommended that firms have all years for which they are claiming compliance verified.

Learning Outcome Statements

c. explain the requirements for verification.

CFA® Level I Curriculum, 2020, Volume 1, Reading 4

User Contributed Comments 4

User Comment
jainrajeshv It is talking about the independent review of compliance of GIPS
sahilb7 Yes. An independent review of the firm as a whole. Not of the indivudual composites.
malecu90 If the GIPS standards are not mandatory, why is verification based on them solely? If a firm doesn't follow GIPS standards, can it still be compliant?
xp_acctant who does the verification?
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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