CGA Ethics Standards & Legal Compliance 5

Question 1

What is the ethical significance of maintaining a separation between an appraiser's role as a buyer/seller and their role as an appraiser?

Accepted Answer

It prevents conflicts of interest that could compromise the objectivity of valuations

Answer

Combining buying/selling with appraising creates financial conflicts of interest that can bias valuations and undermine client trust.

Question 2

According to FTC guidelines, when must a gemstone's country of origin be disclosed in a sales or appraisal context?

Accepted Answer

When it is a material fact that influences consumer purchasing decisions or value

Answer

The FTC requires disclosure of material facts that affect consumer decisions, and origin can be a material factor that significantly influences a gemstone's value and desirability.

Question 3

A CGA receives a subpoena to testify as an expert witness about a gem they previously appraised. Their primary ethical obligation is to:

Accepted Answer

Provide honest, objective testimony based on their professional findings

Answer

Expert witnesses have a duty to the court to provide honest and objective testimony, which supersedes loyalty to any party in the proceeding.

Question 4

Which practice violates the ethical standard of 'independence' for a gemstone appraiser?

Accepted Answer

Allowing a client's lender to review the appraisal methodology before completion

Answer

Allowing an interested party such as a lender to influence the appraisal methodology before completion compromises the appraiser's independence.

Question 5

Under USPAP, when must an appraiser update or readdress a prior appraisal if market conditions have significantly changed?

Accepted Answer

When a client or intended user relies on the prior appraisal for a new transaction or purpose

Answer

When market conditions change significantly and a client intends to use a prior appraisal for a new purpose, the appraiser should update or issue a new appraisal to reflect current conditions.

(CGA) Certified Gemologist Appraiser Practice Test

(CGA) Certified Gemologist Appraiser Practice Test

CGA Ethics Standards & Legal Compliance 5