Set out the features that make a performance attribution process effective

A sound attribution accounts for the whole of the portfolio's excess return or active risk, leaving no large unexplained residual; a big residual usually signals missing trades, poor data or the wrong model. It must mirror how the manager actually makes decisions: a top-down sector rotator suits an allocation-and-selection breakdown, whereas a bottom-up stock picker analysed that way shows allocation effects that were never deliberate choices. It should quantify each active decision the manager took, relative to a benchmark that fits the mandate, so the output gives a complete picture of where value was added or lost. Accurate holdings, prices and transactions, and consistent return calculation, are preconditions. Exam cases often ask which of these attributes a described process violates.