USPAP USPAP Compliance and Enforcement 2 — Questions and Answers
Question 1: How often does the Appraisal Standards Board update USPAP?
- Annually
- Every two years (Correct answer)
- Every five years
- Only when federal law requires changes
Correct answer: Every two years
USPAP is updated on a two-year cycle, with each edition effective for a two-year period.
Question 2: Under USPAP, if an appraiser discovers a significant error in a completed and delivered report, what should the appraiser do?
- Ignore the error if the client has not complained
- Notify the client and correct the report if the error is material (Correct answer)
- Notify the state licensing board immediately
- Issue a new appraisal with a current effective date only
Correct answer: Notify the client and correct the report if the error is material
USPAP requires appraisers to notify clients and correct reports when errors are discovered that are material to the appraisal.
Question 3: What is the role of the Appraisal Qualifications Board (AQB) in the appraisal profession?
- Writing and updating USPAP
- Investigating ethics complaints against appraisers
- Establishing minimum education, experience, and examination criteria for licensure (Correct answer)
- Operating the national appraiser registry
Correct answer: Establishing minimum education, experience, and examination criteria for licensure
The AQB establishes the minimum qualification criteria — education, experience, and examination — that states must adopt for appraiser licensure.
Question 4: Under FIRREA, federally related transactions require the use of a state-licensed or state-certified appraiser for appraisals above a certain threshold. Who enforces this requirement?
- The Appraisal Foundation
- Federal financial institution regulators (e.g., OCC, FDIC, Federal Reserve) (Correct answer)
- The Appraisal Subcommittee exclusively
- State courts through litigation only
Correct answer: Federal financial institution regulators (e.g., OCC, FDIC, Federal Reserve)
Federal financial institution regulators such as the OCC, FDIC, and Federal Reserve enforce the requirement for licensed or certified appraisers in federally related transactions.
Question 5: Which of the following statements about USPAP's applicability is accurate?
- USPAP applies only to appraisers with federal government contracts
- USPAP applies to all appraisers in all 50 states by state law adoption (Correct answer)
- USPAP is a voluntary guideline with no legal enforcement mechanism
- USPAP applies only to residential property appraisals
Correct answer: USPAP applies to all appraisers in all 50 states by state law adoption
All 50 states have adopted USPAP as the professional standard for appraisers, making it legally enforceable through state licensing laws.
Question 6: Under USPAP, the term 'appraiser' refers to one who is expected to:
- Hold a state certification only
- Perform valuation services competently and in a manner that is independent, impartial, and objective (Correct answer)
- Work exclusively for lending institutions
- Appraise only real property
Correct answer: Perform valuation services competently and in a manner that is independent, impartial, and objective
USPAP defines an appraiser as one who is expected to perform services competently and with independence, impartiality, and objectivity.
USPAP USPAP Compliance and Enforcement 2
How often does the Appraisal Standards Board update USPAP?