An appraiser discovers after completing an assignment that they made a significant error. According to USPAP, the appraiser should:
Correct Answer
B) Promptly take steps to correct the error
The Ethics Rule requires that when an appraiser discovers a significant error in an appraisal, they must promptly take appropriate steps to remedy the error. This obligation exists regardless of whether the error has been discovered by others.
Why This Is the Correct Answer
Option B correctly reflects USPAP's Ethics Rule requirement that appraisers must promptly take appropriate steps to remedy significant errors when discovered. This obligation is absolute and doesn't depend on timing, client awareness, or delivery status. The word 'promptly' emphasizes the urgency of this professional duty. Taking corrective steps demonstrates professional integrity and helps maintain public trust in the appraisal profession.
Why the Other Options Are Wrong
Option A: Do nothing if the report has already been delivered
This violates USPAP's Ethics Rule which requires action regardless of delivery status. Professional obligations continue after report delivery, and doing nothing could result in disciplinary action and potential harm to parties relying on the incorrect appraisal.
Option C: Wait to see if the client notices the error
This passive approach violates the Ethics Rule's requirement for prompt action. Waiting for client discovery shows lack of professional integrity and could allow the error to cause harm to parties relying on the appraisal for important decisions.
Option D: File a disclosure with the state licensing board
While disclosure may be required in some cases, the primary obligation under USPAP is to correct the error directly with affected parties. Filing with the licensing board doesn't remedy the immediate problem and isn't the first required step.
ERROR = Ethical Responsibility Requires Ongoing Remediation
Remember ERROR: Ethical Responsibility Requires Ongoing Remediation. When you discover an error, your ethical duty requires you to take ongoing action to fix it, regardless of timing or circumstances.
How to use: When you see questions about discovered errors, think ERROR and remember that ethical responsibility requires ongoing remediation - you must always take prompt corrective action.
Exam Tip
Look for keywords like 'promptly,' 'appropriate steps,' and 'remedy' in USPAP Ethics questions. The correct answer usually involves taking immediate positive action rather than passive approaches.
Common Mistakes to Avoid
- -Thinking delivery of the report ends professional responsibility
- -Believing client notification is someone else's responsibility
- -Assuming minor errors don't require correction
Concept Deep Dive
Analysis
This question tests understanding of USPAP's Ethics Rule regarding an appraiser's professional responsibility when discovering significant errors in completed work. The Ethics Rule establishes a proactive duty for appraisers to remedy errors regardless of external circumstances like delivery status or client awareness. This reflects the profession's commitment to integrity and accuracy, emphasizing that professional obligations don't end when a report is delivered. The rule protects both the public trust and the appraiser's professional standing by requiring immediate corrective action.
Background Knowledge
USPAP's Ethics Rule establishes fundamental professional obligations including the duty to remedy significant errors when discovered. This rule applies to all appraisers and creates ongoing responsibility even after assignment completion.
Real-World Application
If an appraiser discovers they used incorrect comparable sales data after delivering a report, they must immediately contact affected parties to provide a corrected analysis, even if it means admitting the mistake and potentially facing liability.
More USPAP Questions
An extraordinary assumption must be:
Under the USPAP Competency Rule, which of the following is required before an appraiser may accept an assignment?
An appraiser is developing an appraisal for a bank loan and discovers that the property has environmental contamination that significantly affects value, but the lender specifically requests that this issue not be mentioned in the report. According to USPAP, the appraiser should:
A Summary Appraisal Report must contain enough information to:
According to USPAP's Ethics Rule, an appraiser must keep confidential information about the client and intended users confidential unless disclosure is required by:
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