A reviewer condemns a report for excluding the cost approach — an exclusion the report explains and the data supports. The review itself is now suspect because:
Correct Answer
C) The reviewer applied a personal preference rather than the credibility standard
Why this is correct: The governing USPAP concept is that a review must evaluate a report's credibility and compliance with standards, not the reviewer's personal methodology preferences. The original report provided an explanation and data supporting its exclusion of the cost approach, which can be compliant. The reviewer's condemnation substitutes a personal preference for the objective credibility standard, making the review itself misleading and suspect. Why the other choices are wrong: The choice stating 'Reviews may never criticize methodology' is wrong because reviews can and should critique methodology if it fails standards. The choice stating 'Formal opinions about the cost approach require a separate engineering license' is wrong; appraisers are permitted to develop and report cost approach opinions. The choice stating 'Short reports are entitled to deference' is wrong; report length does not grant automatic deference from a reviewer's duty to apply standards. Exam tip: Remember, a compliant report explains and supports its scope of work decisions. A review that faults a compliant choice is likely applying a personal bias, which is a USPAP violation for the reviewer.
Why This Is the Correct Answer
Why this is correct: The governing USPAP concept is that a review must evaluate a report's credibility and compliance with standards, not the reviewer's personal methodology preferences. The original report provided an explanation and data supporting its exclusion of the cost approach, which can be compliant. The reviewer's condemnation substitutes a personal preference for the objective credibility standard, making the review itself misleading and suspect. Why the other choices are wrong: The choice stating 'Reviews may never criticize methodology' is wrong because reviews can and should critique methodology if it fails standards. The choice stating 'Formal opinions about the cost approach require a separate engineering license' is wrong; appraisers are permitted to develop and report cost approach opinions. The choice stating 'Short reports are entitled to deference' is wrong; report length does not grant automatic deference from a reviewer's duty to apply standards. Exam tip: Remember, a compliant report explains and supports its scope of work decisions. A review that faults a compliant choice is likely applying a personal bias, which is a USPAP violation for the reviewer.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
If an appraiser uses a hypothetical condition that the subject property is 10% larger than it actually is, this must be:
Under Standard 1, when developing a real property appraisal, an appraiser must:
An appraiser accepts an assignment to appraise a specialized industrial property but has never appraised this property type before. To comply with the Competency Rule, the appraiser:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
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An appraiser is developing an opinion of market value for a 20-unit apartment building. The appraiser finds three comparable sales with the following information: Sale 1: 18 units, sold for $1,800,000; Sale 2: 22 units, sold for $2,200,000; Sale 3: 24 units, sold for $2,280,000. What is the average price per unit for these comparables?
In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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