Q & A Database

The GIPS Standards Q&A database contains questions and answers (Q&As) on various searchable topics that provide additional interpretation on an issue. Q&As are considered to be authoritative guidance and must be followed in order to claim compliance with the GIPS standards.

Content from prior Q&As was included in the GIPS Standards Handbook as much as possible and many Q&As were archived. Change the Status drop-down filter to "Archived" to see the archived Q&As.

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Archived

Effective: 1 May, 2013 - 31 December, 2019

Categories: Performance Examinations

Source: GIPS Executive Committee

The Guidance Statement on Performance Examinations, which has an effective date of 1 July 2012, includes the following new items relating to the representation letter and performance examination report.
Representation letter:
1) The verifier must obtain a representation letter from management of the firm at the conclusion of the performance examination engagement and prior to expressing an opinion.
2) Typically, the representation letter will include the following representations:
To the best of the firm’s knowledge and belief there has been no:

a) fraud or alleged fraud involving management or employees who have significant roles in the firm’s processes and procedures relating to compliance with the GIPS standards, or
b) fraud or alleged fraud involving others that could have a material effect on the firm’s compliance with the GIPS standards.

The performance examination report title must include the words “performance examination”
These items are not included in the Guidance Statement on Verification which is effective 1 January 2011. Are they applicable to verification engagements? If so, what is the effective date of these new items?

Yes, the items described above from the Guidance Statement on Performance Examinations also apply to verifications.

Therefore, the verifier must obtain a representation letter from management of the firm at the conclusion of the verification engagement and prior to expressing an opinion. If the report to be issued by the verifier is a combined verification and performance examination report, the verifier may obtain from management of the firm a single representation letter as long as the letter is obtained at the conclusion of the verification and performance examination engagement and prior to expressing an opinion.

The verification representation letter would typically include the items relating to fraud described above.

In addition, a verification report title must include the word “verification.”

Verifiers must conduct their verification engagements in accordance with the above guidance for all verifications contracted on or after 1 June 2013. The contract date is typically evidenced by the date of the engagement letter signed by management of both the verification firm and the investment management firm. Earlier adoption is encouraged.