IACP Legal & Ethical Standards in Appraisal 2

Question 1

Under USPAP's Ethics Rule, which action constitutes a conflict of interest that must be disclosed?

Accepted Answer

Having a financial interest in a property adjacent to the subject being appraised

Answer

A financial interest in nearby or related properties creates a conflict of interest that must be disclosed under USPAP's Ethics Rule.

Question 2

When an appraiser accepts an assignment with a predetermined value conclusion, this violates which USPAP rule?

Accepted Answer

Ethics Rule — Independence

Answer

Accepting assignments contingent on a specific outcome violates the Independence section of USPAP's Ethics Rule.

Question 3

An appraiser is asked to update an appraisal report originally completed two years ago. What is the primary ethical concern?

Accepted Answer

Market conditions may have changed, requiring a new analysis rather than a simple update

Answer

Significant market changes over two years may make a simple update misleading; the appraiser must ensure the report reflects current conditions.

Question 4

Which of the following best describes 'intended use' as required by USPAP?

Accepted Answer

The purpose for which the client will use the appraisal report

Answer

Intended use refers to how the client or intended users will employ the appraisal, and it shapes the scope of work and report content.

Question 5

An appraiser discovers after completing a report that a comparable sale was fraudulent. The ethical obligation is to:

Accepted Answer

Notify the client and correct the report if the fraudulent sale materially affected the conclusion

Answer

USPAP's Ethics Rule requires appraisers to correct reports containing significant errors, including those based on fraudulent data.

(IACP) Independent Appraisers Certification Program Practice Test