CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

In cases where applicable local laws conflict with the GIPS standards, ______

A. the GIPS standards take precedence.
B. local laws take precedence.
C. the firm should comply with the stricter of the two.
Correct Answer: B

However, the firm should make full disclosure of the conflict.

User Contributed Comments 5

User Comment
mencob This is a hard one as one can refer to the rule of thumb and apply the strictest between the two.
However, local law always takes precedence, otherwise you go to jail...
Gooner7 the key word is "conflict"
NikolaZ only if the stricter GIPS embodies the local laws and applies additional regulations, then C could be correct, but this is a conflict so local laws must take precedence
geofin From the note:
"GIPS standards serve as minimum worldwide standards: if local laws are stricter than GIPS, local laws should be applied. If local laws don't exist or are less strict than GIPS, the GIPS should apply. In cases of conflicts with GIPS, the standards require that local laws and regulations take precedence over GIPS. Firms should disclose the conflicts."
johntan1979 LOCAL LAW takes precedence, NOT the stricter of the two.
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