Appraisal Report & Documentation Flashcards
7 cards from real CFA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Appraisal Report & Documentation flashcards as text
How long should a firearms appraiser retain their workfile after completing an assignment, per USPAP guidelines?
Answer: At least 5 years from the date of the report or 2 years after final disposition of any judicial proceeding, whichever is longer
USPAP Record-Keeping Rule requires workfiles to be retained for at least five years from the report date or two years after judicial proceedings conclude, whichever is longer.
A client asks the appraiser to increase the stated value of a firearm after the report has been issued. What is the correct response?
Answer: Decline to alter the conclusion unless new information or a valid error is identified
Altering a value opinion at a client's request without new supporting information constitutes a violation of professional ethics and potentially fraud.
Which type of appraisal assignment requires the most stringent documentation standards due to IRS scrutiny?
Answer: Charitable contribution appraisals for non-cash donations exceeding $5,000
IRS regulations governing charitable contributions over $5,000 require a qualified appraisal meeting strict criteria, with penalties for non-compliance.
When documenting engraving on a firearm, what information is essential to include in the appraisal report?
Answer: The style, subject matter, coverage, quality, and whether it appears to be factory or aftermarket
Factory engraving, especially on high-grade pieces, significantly increases value, so its style, coverage, quality, and origin must be fully documented.
What is the primary reason an appraiser should disclose any prior services performed on the same property within the appraisal report?
Answer: To maintain transparency and allow users to assess potential bias
USPAP requires disclosure of prior services to allow intended users to evaluate whether prior relationships could affect the appraiser's objectivity.
Which element of an appraisal report specifically identifies who is authorized to rely on the report's conclusions?
Answer: The intended user identification
The intended user section defines which parties may rely on the appraisal, limiting liability and ensuring the report is not misused by unauthorized third parties.
An appraiser is asked to value a firearm 'as if' a cracked stock were repaired. How should this hypothetical condition be handled in the report?
Answer: Clearly label the assignment as involving a hypothetical condition and disclose that the crack exists
Hypothetical conditions must be clearly identified in the report so that users understand the value is contingent on a condition that does not currently exist.