Investment advisers have a fiduciary duty to act in the best interests of their clients. A central tenant of this duty is full and fair disclosure of all material facts to clients. So what you tell your clients about your business and whether you conduct your business consistent with those disclosures goes to the very heart of your fiduciary duty.
Examiners review Form ADV Part 1 and 2A to see how an adviser describes their business, especially those business practices that create potential conflicts of interest between adviser and client. Any discrepancies between your written disclosures and actual practice, or any inaccurate, incomplete or untimely material will indicate to the SEC examiners that the adviser has weak internal control processes and will result in heightened scrutiny by the examiners.