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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ArchivedEffective: 1 June, 2008 - 31 December, 2013Categories: Error CorrectionSource: Guidance Statement on Error Correction
While undergoing our first verification, we noted that we had not consistently calculated asset-weighted standard deviation for our internal risk measure. In two of the past five years, we had calculated an equal-weighted standard deviation and disclosed that an asset-weighted standard deviation was presented. We intend to restate all amounts to reflect the asset-weighted standard deviation because this is the internal dispersion measure we have chosen to present. Does this qualify as an error?
The GIPS standards require firms to present a measure of internal dispersion and do not specify which measure must be used. Both asset-weighted and equal-weighted standard deviation are acceptable measures of internal dispersion. In this instance, the error results from an incorrect dispersion measure presented. The firm must treat this as an error and follow the firm’s established error correction policies and procedures.
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