RPA Report Writing & Ethical Standards 3 — Questions and Answers
Question 1: Which USPAP rule requires an appraiser to keep assignment-related data confidential?
- Confidentiality section of the Ethics Rule (Correct answer)
- Management section of the Ethics Rule
- Scope of Work Rule
- Competency Rule
Correct answer: Confidentiality section of the Ethics Rule
The Confidentiality section of the Ethics Rule prohibits an appraiser from disclosing confidential information or assignment results without proper authorization.
Question 2: Under USPAP, an appraiser who lacks the competency to complete an assignment must:
- Disclose the lack of knowledge, take steps to acquire competency, or decline the assignment (Correct answer)
- Immediately decline and refer to a more experienced appraiser
- Complete the assignment and disclose the deficiency only in the report's addenda
- Obtain client permission to proceed without additional research
Correct answer: Disclose the lack of knowledge, take steps to acquire competency, or decline the assignment
The Competency Rule requires the appraiser to disclose the lack, acquire competency before or during the assignment, or withdraw.
Question 3: A 'limiting condition' in an appraisal report is best described as:
- A statement that constrains the scope, use, or reliability of the appraisal (Correct answer)
- An adjustment made to a comparable for differences from the subject
- A required disclosure about the appraiser's license status
- A legal restriction affecting the title to the subject property
Correct answer: A statement that constrains the scope, use, or reliability of the appraisal
Limiting conditions are statements that restrict the applicability, scope, or reliability of the appraisal conclusions.
Question 4: When is a jurisdictional exception to USPAP permissible?
- When a law or regulation in the jurisdiction conflicts with USPAP and the exception is identified in the report (Correct answer)
- When the client requests a deviation to reduce reporting costs
- When the appraiser's state board issues a standing waiver
- When the property type is not addressed by existing USPAP standards
Correct answer: When a law or regulation in the jurisdiction conflicts with USPAP and the exception is identified in the report
A jurisdictional exception is only permissible when applicable law or regulation precludes compliance with a USPAP requirement, and it must be identified in the report.
Question 5: In the certification required by USPAP, the appraiser must attest that:
- The analyses, opinions, and conclusions are limited only by the stated assumptions and limiting conditions (Correct answer)
- The report was prepared using only the sales comparison approach
- All comparable properties were physically inspected
- The client reviewed and approved the final value conclusion
Correct answer: The analyses, opinions, and conclusions are limited only by the stated assumptions and limiting conditions
The certification must state that conclusions are limited only by reported assumptions and limiting conditions, ensuring transparency about what constrains the appraiser's opinion.
Question 6: Which of the following is an example of an 'extraordinary assumption' in an appraisal?
- Assuming a planned road improvement adjacent to the property will be completed as scheduled (Correct answer)
- Assuming the subject property's legal description is accurate
- Assuming market conditions are stable throughout the reporting period
- Assuming the comparable sales are arm's-length transactions
Correct answer: Assuming a planned road improvement adjacent to the property will be completed as scheduled
An extraordinary assumption presumes a specific uncertain fact to be true; assuming a proposed road will be completed is uncertain and material to the value opinion.
Question 7: Under the Management section of USPAP's Ethics Rule, which practice is prohibited?
- Paying a fee to a referral source that is not disclosed to the client (Correct answer)
- Charging a flat fee rather than an hourly rate for appraisal services
- Delegating data collection to a licensed trainee appraiser
- Using automated valuation model data as a starting point for research
Correct answer: Paying a fee to a referral source that is not disclosed to the client
The Management section prohibits undisclosed fees paid to referral sources because they may impair appraiser independence.
RPA Report Writing & Ethical Standards 3
Which USPAP rule requires an appraiser to keep assignment-related data confidential?