Not sure if I am looking into this too much or it is a typo somewhere within the answers explained by Schweser. Here are the two questions with the corresponding explanations given at the end of the test;
Self Test Question #16
Which of the following policies is required to comply with GIPS?
A. Compliance with GIPS must be verified by an independent third party.
B. Restructuring of the firm’s organization cannot be used as a basis to change the historical performance results of a composite.
C. The definition of the firm must include the firm’s offices in all countries and regions.
Answer: B, Firms cannot alter historical performance records of composites simply because of a reorganization of the firm.This is required by GIPS standard 0.A.15. Third party verification of GIPS compliance and including all geographic offices in the definition of the firm are recommended, but not required.
Self Test Question #18
An investment management firm, Investco, was recently audited by the SEC. Investco included the following statement in its performance presentation report: “This report has been verified as GIPS compliant by Investco’s compliance department and the United States Securities and Exchange Commission.” Does this constitute acceptable verification under GIPS?
A. No, only one part may perform GIPS verification.
B. No, neither party involved in the audit constitutes an acceptable GIPS verification.
C. Yes, because an audit was performed implicitly by the SEC and explicitly by the firm’s audit team.
Answer: B, GIPS verification must be performed by an independent third party. The SEC audit does not constitute a GIPS verification.
So my question doesn’t so much pertain to either question in particular, its just that in the #16 answer given by Schweser they are saying GIPS verification by a third party is recommended but not required and in the #18 answer given, Schweser is saying GIPS verification must be performed by an independent third party. Is GIPS verification by a third party required or is it just recommended?