USPAP USPAP 2 — Questions and Answers
Question 1: Under USPAP, which document sets forth the requirements an appraiser must follow when developing an appraisal?
- Scope of Work Rule (Correct answer)
- Ethics Rule
- Competency Rule
- Record Keeping Rule
Correct answer: Scope of Work Rule
The Scope of Work Rule requires an appraiser to identify the problem to be solved and determine the scope of work necessary to develop credible results.
Question 2: USPAP's Competency Rule requires that prior to accepting an assignment, an appraiser lacking required competency must:
- Decline the assignment entirely
- Disclose the lack of competency to the client and take steps to become competent (Correct answer)
- Refer the assignment to a licensed appraiser
- Complete the assignment and then seek training
Correct answer: Disclose the lack of competency to the client and take steps to become competent
The Competency Rule requires disclosure to the client and that the appraiser take steps to become competent before completing the assignment.
Question 3: Which USPAP Standard applies to the development of a real property appraisal?
- Standard 1 (Correct answer)
- Standard 3
- Standard 5
- Standard 7
Correct answer: Standard 1
Standard 1 addresses the development of a real property appraisal, while Standard 2 covers reporting.
Question 4: What does the term 'intended use' mean in the context of USPAP?
- The valuation method chosen by the appraiser
- The use of the appraisal or appraisal review by the intended user (Correct answer)
- The physical use of the property being appraised
- The regulatory purpose of the assignment
Correct answer: The use of the appraisal or appraisal review by the intended user
Intended use refers to how the client or other intended users will use the appraisal report or review.
Question 5: A USPAP-compliant appraisal report that contains sufficient information to allow intended users to understand the report is called a(n):
- Restricted Appraisal Report
- Summary Appraisal Report
- Appraisal Report (Correct answer)
- Complete Appraisal Report
Correct answer: Appraisal Report
Under current USPAP, the two reporting options are Appraisal Report and Restricted Appraisal Report; the Appraisal Report must contain enough detail for intended users to understand.
Question 6: Under the USPAP Ethics Rule, an appraiser must not accept an assignment contingent on:
- The client's intended use of the report
- A reported value that favors the client (Correct answer)
- The property type being within the appraiser's competence
- The geographic location of the subject property
Correct answer: A reported value that favors the client
Accepting a fee contingent on a pre-determined value conclusion violates the Management section of the Ethics Rule.
Question 7: Which USPAP rule requires an appraiser to preserve and protect the confidentiality of assignment results?
- Scope of Work Rule
- Record Keeping Rule
- Ethics Rule (Correct answer)
- Competency Rule
Correct answer: Ethics Rule
The Confidentiality section of the Ethics Rule prohibits an appraiser from disclosing confidential information or assignment results to anyone other than the client without authorization.
USPAP USPAP 2
Under USPAP, which document sets forth the requirements an appraiser must follow when developing an appraisal?