CAR Professional Standards & Ethics 3 — Questions and Answers
Question 1: Under the Uniform Standards of Professional Appraisal Practice (USPAP), a 'desk review' is best characterized as:
- A review performed without physically inspecting the subject property or comparable sales (Correct answer)
- A review limited to checking arithmetic errors in the original report
- A review that only examines the appraiser's credentials
- A review conducted at the original appraiser's office
Correct answer: A review performed without physically inspecting the subject property or comparable sales
A desk review is conducted entirely from the reviewer's office without any property inspection, relying solely on the information contained in the report and available data.
Question 2: When a CAR review appraiser signs a certification in an appraisal review report, they are certifying that:
- The original appraiser's value conclusion is correct
- The reviewer's opinions and conclusions are their own and free from bias (Correct answer)
- The subject property has been physically inspected by the reviewer
- All comparable sales were personally verified by the reviewer
Correct answer: The reviewer's opinions and conclusions are their own and free from bias
The USPAP certification in a review report confirms that the reviewer's opinions are their own, unbiased, made in good faith, and comply with USPAP requirements.
Question 3: A reviewer who simultaneously works as a loan officer for the same bank that ordered the appraisal review faces which primary ethical concern?
- Competency
- Confidentiality
- Conflict of interest (Correct answer)
- Scope of work
Correct answer: Conflict of interest
Holding dual roles where the reviewer's financial interest in the loan outcome could influence the review conclusion creates a direct conflict of interest under USPAP's Ethics Rule.
Question 4: Which of the following actions by a review appraiser would violate the Confidentiality section of USPAP's Ethics Rule?
- Disclosing assignment results to a state licensing board investigating the original appraiser
- Sharing the reviewed appraisal report with a competing lender without client authorization (Correct answer)
- Retaining copies of the work file after completing the assignment
- Discussing the review methodology with a peer reviewer for quality control
Correct answer: Sharing the reviewed appraisal report with a competing lender without client authorization
USPAP prohibits reviewers from disclosing confidential information or assignment results to third parties not authorized by the client or permitted by law.
Question 5: Under AI's Code of Professional Ethics, what obligation does a review appraiser have if they discover the original appraisal contains intentional misrepresentation?
- Correct the error and complete the review without reporting it
- Report the finding through appropriate channels and document it in the review (Correct answer)
- Decline to complete the review and return the fee
- Contact the original appraiser privately to resolve the issue
Correct answer: Report the finding through appropriate channels and document it in the review
Professional ethics codes require reviewers to document findings of intentional misrepresentation and report through appropriate channels such as state licensing boards or professional associations.
Question 6: In an appraisal review, 'scope of work' decisions must be made BEFORE beginning the assignment primarily because:
- Clients must approve all scope decisions in writing
- Predetermined scope prevents cherry-picking procedures to reach a desired outcome (Correct answer)
- USPAP prohibits changing scope once work begins
- Reviewers cannot bill for scope established after work starts
Correct answer: Predetermined scope prevents cherry-picking procedures to reach a desired outcome
Establishing scope of work before beginning prevents reviewers from selecting only those procedures that support a predetermined conclusion, protecting the integrity of the review.
Question 7: A state-certified review appraiser completes an appraisal review that is later found to violate USPAP. Who bears primary responsibility?
- The client who ordered the review
- The original appraiser whose work was reviewed
- The review appraiser who performed and signed the review (Correct answer)
- The supervisory appraiser if one was involved
Correct answer: The review appraiser who performed and signed the review
The review appraiser who signs the certification is personally responsible for compliance with USPAP, regardless of client instructions or the original appraiser's conduct.
CAR Professional Standards & Ethics 3
Under the Uniform Standards of Professional Appraisal Practice (USPAP), a 'desk review' is best characterized as: