BCA Quality Assurance & Compliance 3

Question 1

A business appraiser is asked to perform a desk review of another appraiser's report. The desk review should be performed in accordance with:

Accepted Answer

USPAP Standards Rules 3 and 4

Answer

USPAP Standards Rules 3 and 4 govern appraisal review, which includes desk reviews of business appraisal reports.

Question 2

Which of the following is NOT an acceptable reason for an appraiser to deviate from a typical appraisal approach in a business valuation?

Accepted Answer

The client prefers a higher value outcome from a specific approach

Answer

Client preference for a higher value is never a legitimate reason to omit or deviate from an applicable approach, as it would compromise independence.

Question 3

Under the BCA credential standards, a compliance officer reviewing an appraisal report should check that the report contains all of the following EXCEPT:

Accepted Answer

A guarantee that the concluded value will not change

Answer

Appraisers cannot and must not guarantee value conclusions; reports must be presented as professional opinions, not guarantees.

Question 4

A business appraiser with a conflict of interest who fails to disclose it to the client is most directly violating the USPAP Ethics Rule section on:

Accepted Answer

Conduct

Answer

The Conduct section of USPAP's Ethics Rule requires appraisers to disclose conflicts of interest that could compromise impartiality.

Question 5

When reviewing a business appraisal for compliance, which area is MOST critical to verify under the income approach?

Accepted Answer

Support for the selected discount or capitalization rate

Answer

The discount or capitalization rate is the most sensitive assumption in the income approach and must be well-supported to withstand quality review.

(BCA) Business Certified Appraiser Practice Test

(BCA) Business Certified Appraiser Practice Test

BCA Quality Assurance & Compliance 3