An appraiser discovers an error in data they previously relied on for a delivered report. What is required?
Correct Answer
C) Consideration of whether users must be notified
Why this is correct: USPAP requires appraisers to consider whether an error discovered after report delivery is significant enough to affect the user's reliance, and if so, to notify the user. Why the other choices are wrong: "Nothing, as the report was accurate when issued" ignores the duty to correct material errors. "A note in the workfile recording the discovery" is insufficient if users are affected. "Reissue of the report with a new effective date" would misrepresent the original effective date and market conditions. Exam tip: Upon discovering a material error, assess its impact and notify users if it affects their reliance on the report.
Why This Is the Correct Answer
Once an error is known, the appraiser must consider its materiality and whether intended users relying on the report must be notified and the report corrected.
Why the Other Options Are Wrong
Option A: Nothing, as the report was accurate when issued
Accuracy at issuance does not end the obligation. Knowingly permitting continued reliance on a report now known to be affected is the concern.
Option B: A note in the workfile recording the discovery
A workfile note informs nobody who is relying on the report. The workfile is not communicated to users.
Option D: Reissue of the report with a new effective date
A new effective date would produce a different appraisal rather than correcting the existing one. Correction preserves the original effective date.
Now That You Know
Now That You Know, silence becomes a choice. Consider materiality, then act.
How to use: Two questions: does it change the conclusions, and who is relying on it. The answers determine the response.
Exam Tip
A correction retains the original effective date. Changing the effective date produces a new appraisal rather than a corrected one.
Common Mistakes to Avoid
- -Treating accuracy at issuance as ending the obligation
- -Documenting the discovery only in the workfile
- -Changing the effective date when correcting
Concept Deep Dive
Analysis
Discovering an error in a delivered report puts the appraiser in a position governed by the Ethics Rule's conduct provisions: an appraiser must not knowingly permit an employee or another to communicate a misleading report, and must not knowingly communicate one themselves. Once the error is known, continuing to let intended users rely on a conclusion the appraiser knows to be affected is a form of knowing communication. So the required step is to consider whether the error is material — whether it affects the opinions and conclusions — and, if it does, to notify the client and take corrective action, which may mean a corrected report clearly identified as such. Not every discovered error is material, which is why the obligation is framed as consideration rather than automatic reissue. The distractors fail in both directions: doing nothing ignores the obligation, a workfile note informs nobody who is relying on the report, and automatic reissue with a new effective date would change the appraisal rather than correct it.
Background Knowledge
USPAP's Ethics Rule prohibits knowingly communicating a misleading report. Where an appraiser learns of an error affecting a delivered report, the materiality must be considered and, if material, the client notified and corrective action taken.
Real-World Application
An appraiser learning that a comparable's reported square footage was wrong recomputes the adjustment, finds the conclusion changes, and issues a corrected report to the client.
More Emerging Methods Questions
How does an alternative inspection method affect the appraiser's disclosure obligations?
A collector's photographs show a condition the appraiser believes needs specialist assessment. What is the appropriate step?
What responsibility does an appraiser retain for an error originating in a third-party database?
Under current USPAP guidance, what is the output of an automated valuation model before an appraiser analyzes it?
Which assignment type still requires the appraiser to develop an opinion of value?
A model returns an estimate far from the appraiser's own conclusion. What is the appropriate response?
What does it mean that a tool cannot comply with USPAP?
An appraiser is asked to review an assignment where an AVM supplied the value. What does the review examine?
Why is the date a data extract was pulled worth recording in the workfile?
A desktop appraisal is best described as an assignment completed how?
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