One of the Learning Outcome Statements at the Expert Level requires CIPM candidates to know the pre-verification procedures and verification procedures prescribed in the GIPS standards. A common question that I get is how to tell whether something is a pre-verification procedure or a verification procedure.
A very simple test can be done to determine whether a procedure is part of the pre-verification list or the verification list (this presumes, of course, that you know whether a procedure is required altogether).
Pre-verification procedures are about the verifier either having the knowledge to do a verification (e.g., knowing GIPS, knowing laws regarding performance presentation, etc.) and getting to know the firm that it is doing the verification for and how that firm does things (i.e., getting to know the firms policies).
Verification procedures, on the other hand, are all about doing the work of the verification itself; i.e., testing, sampling, evaluating, and other work necessary to determine that the two tests of verification are met:
– whether the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis
– whether the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards.
I suggest candidates review the procedures and this test condition – I think you’ll then see that it is quite easy to tell the difference!