Regulatory Standards & Ethical Practices Flashcards
7 cards from real CMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Standards & Ethical Practices flashcards as text
When appraising mineral rights under the Mineral Leasing Act of 1920, which land category is specifically subject to this federal leasing framework?
Answer: Federal public domain lands
The Mineral Leasing Act of 1920 governs oil, gas, coal, and other minerals on federal public domain lands, establishing the leasing system for those resources.
The USPAP Scope of Work Rule primarily addresses which appraisal concern?
Answer: How much work is necessary and appropriate for a credible assignment result
The Scope of Work Rule requires appraisers to identify and perform the scope of work necessary to produce credible assignment results given the intended use.
A minerals appraiser discovers during an assignment that a prior appraisal of the same property contained a significant factual error. What is the ethical obligation?
Answer: Correct the record and disclose the error in the current report
Appraisers have an ethical duty to produce credible and accurate reports; if a prior error affects the current assignment, it must be addressed and disclosed appropriately.
Under the SEC's Regulation S-K and S-X rules relevant to mining companies, what is the primary disclosure requirement for mineral reserves?
Answer: Only SEC-compliant reserve estimates based on reasonable certainty may be publicly disclosed
SEC Regulation S-K (Item 1300) requires public companies to disclose mineral reserves based on reasonable certainty standards, replacing the older Industry Guide 7.
What is the primary distinction between a 'restricted appraisal report' and a 'summary appraisal report' under USPAP?
Answer: A restricted report limits distribution to the client only
A Restricted Appraisal Report limits the use of the report to the client and identified intended users due to its condensed content.
Which principle requires a CMA appraiser to avoid actions that could be construed as misleading, even if technically accurate?
Answer: The Ethics Rule — Conduct section
The Conduct section of the USPAP Ethics Rule prohibits appraisers from communicating assignment results in a misleading or fraudulent manner.
In the context of mineral appraisal, what does 'highest and best use' analysis require the appraiser to evaluate?
Answer: The most legally permissible, physically possible, financially feasible, and maximally productive use
Highest and best use requires simultaneous satisfaction of four criteria: legal permissibility, physical possibility, financial feasibility, and maximum productivity.