An appraiser discovers that they made an error in a completed appraisal report that has been delivered to the client. Under USPAP, the appraiser must:
Correct Answer
B) Promptly take appropriate action to remedy the error
The Ethics Rule requires that when an appraiser becomes aware of an error in their work, they must promptly take appropriate action to remedy the error, which typically means notifying affected parties.
Why This Is the Correct Answer
Option B is correct because USPAP's Ethics Rule explicitly requires appraisers to promptly take appropriate action when they become aware of an error in their work. This proactive approach protects clients, intended users, and the public from relying on incorrect information. The word 'promptly' indicates urgency, and 'appropriate action' typically includes notifying affected parties and potentially issuing corrections or new reports. This requirement maintains professional integrity and public trust in the appraisal profession.
Why the Other Options Are Wrong
Option A: Wait to see if the client notices the error
Option A is wrong because waiting passively for the client to notice the error violates the Ethics Rule's requirement for prompt action. This approach could allow incorrect information to be used for important financial decisions, potentially causing harm to the client or other parties.
Option C: Issue a new appraisal report only if requested
Option C is wrong because it makes error correction contingent on client request rather than the appraiser's professional duty. USPAP requires proactive action regardless of whether the client requests a new report, as the appraiser has an independent ethical obligation to address known errors.
Option D: Notify only future clients about the error
Option D is wrong because it fails to address the current error and doesn't help the affected parties who received the incorrect appraisal. While transparency with future clients may be appropriate, the primary obligation is to remedy the specific error that has already occurred.
PROMPT Action Rule
P-R-O-M-P-T: Professional Responsibility Obligates Making Prompt Corrections. Remember that 'PROMPT' action is required - you can't wait, delay, or ignore discovered errors.
How to use: When you see questions about discovered errors in completed appraisals, immediately think 'PROMPT' and look for the answer choice that requires immediate, proactive action by the appraiser rather than passive waiting or conditional responses.
Exam Tip
Look for key words like 'promptly,' 'immediately,' or 'appropriate action' in answer choices about error correction - these typically indicate the correct USPAP-compliant response.
Common Mistakes to Avoid
- -Thinking the appraiser's responsibility ends when the report is delivered
- -Believing error correction is optional or dependent on client request
- -Assuming passive approaches like waiting for others to notice errors are acceptable under USPAP
Concept Deep Dive
Analysis
This question tests knowledge of USPAP's Ethics Rule regarding professional responsibility when errors are discovered in completed work. The Ethics Rule establishes a proactive duty for appraisers to address errors rather than taking a passive approach. This requirement reflects the profession's commitment to integrity and protecting the public trust. The rule emphasizes that professional responsibility doesn't end when the report is delivered, but continues if errors are later discovered.
Background Knowledge
USPAP's Ethics Rule establishes fundamental principles that govern appraiser conduct, including requirements for integrity, objectivity, and professional responsibility. When appraisers discover errors in completed work, they have an affirmative duty to take corrective action to protect clients and maintain public trust in the profession.
Real-World Application
An appraiser realizes they used incorrect square footage data after delivering a report to a lender for a mortgage decision. Under USPAP, they must immediately contact the lender to notify them of the error and likely provide a corrected report, even if the loan has already been approved based on the incorrect appraisal.
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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