USPAP USPAP 5 — Questions and Answers
Question 1: Under USPAP, which of the following is an example of a 'jurisdictional exception'?
- An appraiser choosing to omit the income approach because it is not applicable
- A law requiring the appraiser to use a specific method that conflicts with a USPAP standard (Correct answer)
- A client requesting a value that is higher than market supports
- An appraiser using data from a different geographic market
Correct answer: A law requiring the appraiser to use a specific method that conflicts with a USPAP standard
The Jurisdictional Exception Rule applies when applicable law or regulation conflicts with a USPAP standard, allowing that portion of USPAP to be set aside.
Question 2: An appraiser who signs a certification as a supervisory appraiser accepts responsibility for:
- Only the portions of the report they personally completed
- The appraisal report in its entirety (Correct answer)
- The trainee's licensing status and continuing education
- The client's intended use of the appraisal
Correct answer: The appraisal report in its entirety
A supervisory appraiser who signs the certification accepts responsibility for the entire appraisal report, not just portions they personally performed.
Question 3: Which of the following best defines 'intended user' under USPAP?
- Any person who reads the appraisal report
- The client and any other party the appraiser identifies as using the appraisal in the specific assignment (Correct answer)
- The government agency that regulates the appraiser's license
- The lender who ultimately funds the transaction
Correct answer: The client and any other party the appraiser identifies as using the appraisal in the specific assignment
Intended users are the client and any other parties the appraiser identifies, by name or type, as users of the appraisal at the time of the assignment.
Question 4: Under USPAP's Confidentiality section, an appraiser MAY disclose assignment results without client permission when:
- A potential buyer requests the information
- Another appraiser asks to peer-review the report
- Disclosure is required by a court order or by applicable law (Correct answer)
- A lender affiliated with the client requests the data
Correct answer: Disclosure is required by a court order or by applicable law
The Confidentiality section permits disclosure without client consent when required by due process, a court order, or applicable law.
Question 5: The USPAP Scope of Work Rule requires that the scope of work be sufficient to produce:
- A report that satisfies all potential third-party readers
- Assignment results that are credible given the intended use (Correct answer)
- The maximum amount of research possible for the client
- Results that exceed the minimum standards set by the client
Correct answer: Assignment results that are credible given the intended use
The Scope of Work Rule requires that the selected scope produce credible assignment results given the intended use and intended users.
Question 6: Which of the following statements about USPAP Advisory Opinions is correct?
- Advisory Opinions are legally binding on all appraisers
- Advisory Opinions illustrate how USPAP applies in specific situations but are not part of USPAP itself (Correct answer)
- Advisory Opinions replace the standards they address
- Advisory Opinions require appraiser compliance as a condition of licensure
Correct answer: Advisory Opinions illustrate how USPAP applies in specific situations but are not part of USPAP itself
Advisory Opinions are guidance documents that illustrate the applicability of USPAP in specific situations but are not enforceable standards themselves.
Question 7: An appraiser who provides an appraisal for a fee and does not disclose a financial interest in the subject property has violated which section of the Ethics Rule?
- Conduct (Correct answer)
- Management
- Confidentiality
- Record Keeping
Correct answer: Conduct
The Conduct section of the Ethics Rule prohibits appraisers from performing an assignment if they have a bias or a financial interest that is not disclosed.
USPAP USPAP 5
Under USPAP, which of the following is an example of a 'jurisdictional exception'?