Answer: Conducted on a firm-wide basis, encompassing the entire firm.

**Explanation:** - **Option A** is correct because, under the GIPS standards, verification is performed on a firm-wide basis, not on specific composites or pooled funds. This ensures a comprehensive assessment of the firm's compliance with the standards. - **Option B** is incorrect because verification must be conducted by an independent third-party verifier, not the firm's internal compliance department. The verifier tests the firm's adherence to the GIPS standards on a firm-wide basis. - **Option C** is incorrect because verification is not mandatory for firms claiming compliance with the GIPS standards. However, firms may voluntarily undergo verification to enhance confidence in their compliance claims.

Author: LeetQuiz Editorial Team