Wednesday, July 20, 2011
Expanding ones vocabulary
In submitting my comments regarding the proposed changes to the Performance Examination Guidance Statement, I couldn't recall one particular word that would have worked, but then saw it in a front page article in yesterday's WSJ. The subheading: "Authors Who Crave Verisimilitude Learn Secrets of Bodice Ripping"; you can probably guess which word I am referring to.
Well, I came to know the word quite some time ago, but hadn't really taken ownership of it, but my comment letter provided me the opportunity, but I failed to take advantage of it. And "how exactly" you might ask? Well, the GIPS(R) (Global Investment Performance Standards) Executive Committee has suggested that perhaps verifiers should seek out documentation for the client being examined from independent parties, such as custodians and brokers. In my response I suggest that it's possible that to save the verifier the hassle, they could perhaps ask the client to contact these parties and ask them to provide the materials. However, who's to say that the client, who might be committing fraud, might not "go the extra mile" and fabricate what appears to be legitimate materials from these parties? And so, the verisimilitude they present might fool the verifier, right? This, to me, suggests that one cannot possibly rely upon the money manager as doing this on behalf of the verifier, but rather that the verifier must do all the "leg work" themselves.
And so, while I missed out on the opportunity to employ said word in my letter (and for that matter, our July newsletter which is about to be published), I got to here AND hopefully provided you with some insightful information about this document; more to follow!
p.s., if "verisimilitude" is a new or perhaps forgotten word for you, it means "the appearance or semblance of truth; likelihood; probability; something, as an assertion, having merely the appearance of truth."