ARA Professional Standards & Competencies 2 — Questions and Answers
Question 1: Under USPAP, when an appraiser accepts an assignment with a condition that the value conclusion must meet a predetermined amount, this is known as:
- A contingent assignment
- An advocacy assignment
- A prohibited assignment condition (Correct answer)
- A restricted appraisal report
Correct answer: A prohibited assignment condition
USPAP prohibits assignment conditions that require a predetermined value conclusion, as they compromise appraiser independence.
Question 2: An ARA appraiser is asked to appraise a large irrigated farm in a region where they have no prior experience. What does USPAP require before accepting the assignment?
- Decline the assignment entirely
- Acquire the necessary competency before completing the assignment (Correct answer)
- Complete the assignment and disclose the lack of experience in the report
- Partner with a local sales agent
Correct answer: Acquire the necessary competency before completing the assignment
USPAP's Competency Rule requires appraisers to acquire necessary knowledge and experience before completing an assignment if they lack competency.
Question 3: Which USPAP rule specifically addresses an appraiser's obligation to maintain records of each appraisal assignment?
- Ethics Rule
- Competency Rule
- Record Keeping Rule (Correct answer)
- Scope of Work Rule
Correct answer: Record Keeping Rule
The USPAP Record Keeping Rule requires appraisers to prepare and maintain a workfile for each appraisal assignment.
Question 4: A rural appraiser discovers mid-assignment that comparable sales data is extremely sparse in the subject's market area. What is the most appropriate professional response?
- Abandon the assignment without notice
- Expand the search area and document the process in the scope of work (Correct answer)
- Use only the available sales and ignore the data gap
- Apply national average adjustment rates
Correct answer: Expand the search area and document the process in the scope of work
Expanding the geographic or time scope and documenting the expanded search demonstrates due diligence and transparency in the scope of work.
Question 5: Under the USPAP Ethics Rule, an appraiser who performs an appraisal and then later lists the same property for sale faces a potential violation related to:
- Geographic competency
- Confidentiality
- Conflicts of interest and management pressure (Correct answer)
- Record keeping
Correct answer: Conflicts of interest and management pressure
Acting as a listing agent for a property you appraised creates a conflict of interest that must be disclosed or avoided per the Ethics Rule.
Question 6: The USPAP definition of 'scope of work' includes all of the following EXCEPT:
- The type and extent of research performed
- The type and extent of analyses applied
- The appraiser's compensation structure (Correct answer)
- The type of appraisal report prepared
Correct answer: The appraiser's compensation structure
Scope of work covers research, analyses, and report type — compensation is addressed in the Ethics Rule, not the Scope of Work Rule.
Question 7: An ARA candidate is supervised by a certified appraiser on a complex ranch appraisal. Who is ultimately responsible for the credibility of the appraisal report?
- The supervising appraiser only
- The ARA candidate only
- Both the supervising appraiser and the candidate share responsibility (Correct answer)
- The client who ordered the appraisal
Correct answer: Both the supervising appraiser and the candidate share responsibility
When both a supervisory appraiser and a trainee sign a report, both are responsible for the work and conclusions contained therein.
ARA Professional Standards & Competencies 2
Under USPAP, when an appraiser accepts an assignment with a condition that the value conclusion must meet a predetermined amount, this is known as: