First, we can consider Level I to be analogous to today's "verifications," while Level II is akin to today's "performance examinations." Now to the figure:
- In the beginning, under the "old" AIMR-PPS(R), we began with the requirement that firms MUST undergo a firm-wide Level I verification before commencing with a (composite level) Level II verification.
- Things got a big awkward when the large accounting firms declared that they would not do a Level I, but would do a Level II. And so, a "Modified Level II" verification was added, which was at the composite level, but incorporated the elements of Level I.
- The 1997 edition of GIPS changed the original Level II to its Modified form, but dropped the qualifier.
- Moving onto GIPS, the draft did not reference performance examinations, but only firm-wide verification.
- However, when the first edition was presented in 1999, performance examinations appeared.