CAA Appraisal Standards and Ethics 2

Question 1

Under USPAP, how long must an appraiser retain the workfile for a vehicle appraisal not involved in litigation?

Accepted Answer

At least 5 years after preparation

Answer

The Record Keeping Rule requires retaining a workfile for at least five years after preparation, or two years after final disposition of any judicial proceeding in which testimony was given, whichever is later.

Question 2

Which USPAP standards specifically govern the development and reporting of personal property appraisals such as motor vehicles?

Accepted Answer

Standards 7 and 8

Answer

Standards 7 and 8 address personal property appraisal development and reporting, which includes vehicles.

Question 3

An insurer offers to pay an appraiser a bonus if the appraised value of a total-loss vehicle comes in below a target amount. What should the appraiser do?

Accepted Answer

Decline, because compensation contingent on a predetermined result is prohibited

Answer

The Ethics Rule prohibits accepting compensation contingent on reporting a predetermined result or a direction in value that favors the client.

Question 4

Within what period must an appraiser disclose prior services regarding the same vehicle to a new client?

Accepted Answer

Three years

Answer

USPAP requires disclosure of any services performed regarding the subject property within the three years prior to accepting the assignment.

Question 5

An appraiser is asked to value a vehicle assuming repairs that have not yet been made are completed. This assumption is best classified as:

Accepted Answer

A hypothetical condition

Answer

A hypothetical condition is contrary to what is known to exist on the effective date but is assumed for the purpose of analysis.

CAA - Certified Automotive Appraiser Practice Test

CAA - Certified Automotive Appraiser Practice Test

CAA Appraisal Standards and Ethics 2