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
Which of the following best describes the role of the Appraisal Practices Board (APB) under The Appraisal Foundation?
Answer: It develops voluntary guidance on valuation methods and techniques
The APB issues voluntary guidance documents on valuation methods and techniques to assist appraisers, but its guidance is not mandatory like USPAP.
When a mineral appraiser uses the income approach for a producing oil and gas property, the ethical obligation regarding assumption disclosure requires:
Answer: Clear identification of all extraordinary assumptions and hypothetical conditions
USPAP requires clear disclosure of all extraordinary assumptions and hypothetical conditions because they directly affect the credibility of the value conclusion.
Under the federal Split Estate Act, a mineral appraiser must recognize that:
Answer: The federal government can own mineral rights beneath privately-owned surface land
The Federal Split Estate Act acknowledges that federal subsurface mineral rights can exist beneath private surface land, creating complex ownership and access issues affecting value.
A CMA appraiser is retained as an expert witness in a condemnation proceeding. Which USPAP standard governs litigation support assignments?
Answer: Standard 1 and 2 (Real Property Appraisal)
When providing appraisal services in litigation, USPAP Standards 1 and 2 for real property appraisal still apply; appraisers are not exempt from USPAP in court proceedings.
The concept of 'workfile' under USPAP is significant because it:
Answer: Contains data and documentation sufficient to support the appraiser's opinions and conclusions
USPAP's Record Keeping Rule requires appraisers to maintain a workfile containing all data and documentation supporting the assignment results for a minimum retention period.
An appraiser who overstates mineral reserves in an appraisal report to help a client secure financing could face consequences under which federal law?
Answer: The False Statements Act (18 U.S.C. § 1001)
Making false statements in documents used in federal financial transactions can constitute a federal crime under 18 U.S.C. § 1001, in addition to USPAP ethics violations.
When a mineral appraiser engages in a peer review process, the primary purpose under professional ethical standards is to:
Answer: Improve professional quality and ensure adherence to standards through constructive evaluation
Peer review serves to uphold professional quality and standards by providing constructive evaluation of appraisal work, ultimately protecting public trust in the profession.