CGA CGA Appraisal Standards & Ethics 1 — Questions and Answers
Question 1: Which document establishes the minimum standards of professional appraisal practice in the United States?
- Uniform Standards of Professional Appraisal Practice (USPAP) (Correct answer)
- International Valuation Standards (IVS)
- Appraisal Foundation Guidelines (AFG)
- Federal Appraisal Compliance Code (FACC)
Correct answer: Uniform Standards of Professional Appraisal Practice (USPAP)
USPAP, promulgated by the Appraisal Foundation, establishes the minimum standards for professional appraisal practice in the U.S.
Question 2: Under USPAP, what is the primary purpose of the Competency Rule?
- To ensure appraisers possess the knowledge and experience required to complete an assignment competently (Correct answer)
- To require appraisers to pass additional licensing exams before each assignment
- To mandate appraisers work only within their home state
- To restrict appraisers from accepting complex assignments
Correct answer: To ensure appraisers possess the knowledge and experience required to complete an assignment competently
The Competency Rule requires appraisers to have the knowledge, experience, and skills necessary to complete each specific assignment before accepting it.
Question 3: Which USPAP rule prohibits an appraiser from accepting an assignment when the fee is contingent upon a predetermined value conclusion?
- Ethics Rule (Correct answer)
- Competency Rule
- Scope of Work Rule
- Record Keeping Rule
Correct answer: Ethics Rule
The Ethics Rule prohibits contingent fee arrangements where the appraiser's compensation is tied to a specific value outcome.
Question 4: Under USPAP, how long must an appraiser retain work files for a federally related transaction?
- At least 5 years after the date of the report or 2 years after final disposition of any judicial proceeding (Correct answer)
- At least 3 years after the date of preparation
- At least 7 years after the assignment is completed
- At least 1 year after the client receives the report
Correct answer: At least 5 years after the date of the report or 2 years after final disposition of any judicial proceeding
USPAP requires work files to be retained for at least five years after report preparation or two years after final judicial disposition, whichever is longer.
Question 5: What is a 'Restricted Appraisal Report' under USPAP?
- A report with limited content intended for use only by the client (Correct answer)
- A report that restricts the appraiser's access to the property
- A preliminary appraisal report used for internal bank review only
- A report prepared for properties under legal dispute
Correct answer: A report with limited content intended for use only by the client
A Restricted Appraisal Report contains minimal content and is intended solely for the client's use, as it does not contain sufficient information for third-party reliance.
Question 6: Which USPAP standard governs the development of a real property appraisal?
- Standard 1 (Correct answer)
- Standard 2
- Standard 3
- Standard 6
Correct answer: Standard 1
USPAP Standard 1 governs the development of a real property appraisal, outlining the appraiser's obligations during the analysis process.
CGA CGA Appraisal Standards & Ethics 1
Which document establishes the minimum standards of professional appraisal practice in the United States?