Unbiased reporting

Choosing an accurate database is of great interest in the hedge fund industry, where a lack of transparency is often observed. Performance measurement based on an inaccurate database is unreliable in all cases. Many biases can affect performance.

Liang (2003b)1 enumerates some factors with positive effect on database quality. First, funds audited effectively have lower absolute return discrepancies than those for which audit dates are missing. Second, the respect of a transparency principle i