What is Being Proposed?
The exposure draft details major changes to the verification process. A simple way to see this is the number of pages that are devoted to it. The current version of the Standards have roughly four pages on verification; the proposed language is roughly five-times as much, numbering approximately 20 pages.
The procedures for both verifications and examinations is much more detailed, more prescriptive.
The scope of verification has been expanded; for example, verifiers will be required to review marketing materials and advertisements.
The document proposes specific wording for the terms
of engagement: this is not the case today. The engagement letter must include:
- 1The objective and scope of the engagement, including the period(s) being verified;
- 2The responsibilities of the verifier;
- 3The responsibilities of the firm;
- 4A statement about the inherent limitations of a verification;
- 5A statement that the GIPS standards are the evaluation criteria for the engagement;
- 6A statement that the verification does not provide assurance on the operating effectiveness of the firm's controls or policies and procedures for complying with the GIPS standards; and
- 7A statement that the firm agrees to provide the verifier with a representation letter at the conclusion of the verification.