A client requests access to performance data that includes undisclosed assumptions.

A client requests access to performance data that includes undisclosed assumptions.

• A. Standard V.A Diligence and Reasonable Basis
• B. Standard V.B Communication with Clients and Prospective Clients
• C. Standard VI.B Priority of Transactions
• D. Code of Ethics and Standards

Answer: (B)

When you present performance data to a client, you must clearly disclose the assumptions, methods, and limitations behind that data. A client’s request for access to performance results that include undisclosed assumptions creates a risk of presenting information that could mislead if the viewer doesn’t know what was assumed or omitted. The rule here is about transparent communication with clients and prospective clients, ensuring that any material assumptions are disclosed so the client can properly understand and evaluate the performance. Diligence and Reasonable Basis matters for ensuring the data has a sound foundation, but the specific issue in this scenario is the need to communicate those details to the client. The other options don’t address the obligation to disclose assumptions in client communications, and the broad Code of Ethics and Standards, while relevant in general, isn’t as directly applicable to the disclosure obligation as the client-communication standard.

When you present performance data to a client, you must clearly disclose the assumptions, methods, and limitations behind that data. A client’s request for access to performance results that include undisclosed assumptions creates a risk of presenting information that could mislead if the viewer doesn’t know what was assumed or omitted. The rule here is about transparent communication with clients and prospective clients, ensuring that any material assumptions are disclosed so the client can properly understand and evaluate the performance.

Diligence and Reasonable Basis matters for ensuring the data has a sound foundation, but the specific issue in this scenario is the need to communicate those details to the client. The other options don’t address the obligation to disclose assumptions in client communications, and the broad Code of Ethics and Standards, while relevant in general, isn’t as directly applicable to the disclosure obligation as the client-communication standard.