Of the following disclosures included in Swift’s report, determine which is least likely to indicate a violation of the GIPS.
A. The composite was created in November 2002.
B. All returns are calculated in accordance with the GIPS.
C. The Large-Cap Equity Composite includes only the large-cap equity segment of firm portoflios that invest in large-cap equities.
Answer is A.
For choice A, how is this not a violation if the presentation starts in January 2003? The answer choice even says “Beginning January 1, 2011, if the initial period is less than one year, the return through year-end must be presented.” Is it because the return presetnation shows through 2009 and thefore, the standard doesn’t apply?
For choice B. why is that note a violation?
For choice C, why is that a violation? It’s a carve-out and carve-outs are allowed. Is it because there has to be explicit mention of being managed separately with its own cash balance?