An appraiser discovers an error in a completed appraisal report that affects the value conclusion. According to USPAP, the appraiser must:
Correct Answer
B) Correct the error and provide the corrected report to all intended users
USPAP Ethics Rule requires that when an appraiser discovers a significant error in a completed work product, they must correct the error and provide the corrected version to all parties who received the original report. The appraiser cannot selectively correct errors or ignore them regardless of magnitude.
Why This Is the Correct Answer
Option B correctly states the USPAP Ethics Rule requirement that appraisers must correct significant errors and provide the corrected report to all intended users. This obligation is mandatory, not optional, and applies regardless of the error's magnitude. The rule ensures that all parties who received and may be relying on the original report receive the corrected information. This maintains the integrity of the appraisal process and protects all stakeholders from making decisions based on erroneous information.
Why the Other Options Are Wrong
Option A: Ignore the error if it's less than 5% of the value
USPAP does not establish any percentage threshold below which errors can be ignored - any error that affects the value conclusion is considered significant and must be corrected regardless of its magnitude.
Option C: Notify the client but only correct if requested
The Ethics Rule makes error correction mandatory, not dependent on client request - appraisers must correct significant errors and cannot wait for client permission or instruction to do so.
Option D: File a new appraisal report with the correct information
Filing a new appraisal report is not the required remedy - the appraiser must correct the existing report and provide the corrected version to all who received the original, not create an entirely new appraisal.
ALL MUST GET CORRECTED
Remember 'ALL MUST GET CORRECTED' - ALL intended users MUST GET the CORRECTED report when a significant error affecting value is discovered.
How to use: When you see error correction questions, think 'ALL MUST GET CORRECTED' to remember that correction is mandatory and all original recipients must receive the corrected version.
Exam Tip
Look for absolute language in USPAP questions - words like 'must,' 'shall,' and 'required' indicate mandatory obligations, while options suggesting discretion or thresholds are typically incorrect.
Common Mistakes to Avoid
- -Thinking there's a percentage threshold below which errors can be ignored
- -Believing client permission is needed before making corrections
- -Assuming only the client needs to receive the corrected report
Concept Deep Dive
Analysis
This question tests understanding of USPAP Ethics Rule requirements regarding error correction in completed appraisal reports. The Ethics Rule establishes a mandatory duty for appraisers to correct significant errors that affect value conclusions, regardless of the error's magnitude or the appraiser's preference. This requirement ensures integrity in the appraisal process and protects all parties who rely on appraisal reports. The rule does not provide exceptions based on error size, client requests, or selective notification - it creates an absolute obligation to correct and redistribute corrected reports to all intended users who received the original flawed report.
Background Knowledge
USPAP Ethics Rule establishes mandatory professional conduct standards for appraisers, including requirements for error correction in completed work products. The rule prioritizes accuracy and integrity in appraisal reporting, requiring appraisers to take corrective action when significant errors are discovered that affect value conclusions.
Real-World Application
If an appraiser discovers they used incorrect square footage that resulted in a $20,000 overvaluation, they must immediately correct the report and send the corrected version to the lender, borrower, and any other intended users, even if the loan has already closed.
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