Explanation:
Statement 1 is correct: Verification under GIPS standards does improve the consistency of a firm's GIPS-compliant presentations. Verification is a process where an independent third party verifies that the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis.
Statement 2 is incorrect: Verification does not provide assurance to clients that specific composite presentations made by a firm are accurate. Verification only confirms that the firm has complied with the GIPS standards on a firm-wide basis. It does not verify the accuracy of any specific composite presentation. For assurance about specific composite presentations, a performance examination (not verification) would be required.
Therefore, only Statement 1 is accurate, making option A the correct answer.
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Which of the following statements relating to the GIPS standards is accurate?
| Statement 1 | Verification improves the consistency of a firm's GIPS-compliant presentations. |
|---|---|
| Statement 2 | Verification provides assurance to clients that specific composite presentations made by a firm are accurate. |
A
Statement 1 only
B
Statement 2 only
C
Both Statement 1 and Statement 2