In a nonfederal assignment, a binding applicable law actually precludes compliance with one identified USPAP requirement. What is the appropriate treatment?
Correct Answer
B) Void only the precluded part, obey the law, and disclose and cite it
Determine that an actual law or regulation precludes compliance, rather than merely expressing a client preference or customary practice. Only the affected USPAP part is void for that assignment; comply with the law and the remaining applicable requirements and conspicuously identify the conflict and legal authority in the report. State or local law cannot void federally mandated USPAP compliance. USPAP does not universally require development of all three approaches.
Why This Is the Correct Answer
Option B is correct because USPAP states that if an applicable law or regulation precludes compliance with any part of USPAP, only that part becomes void for that assignment. The appraiser complies with the law, follows all remaining applicable USPAP requirements, and clearly and conspicuously discloses the voided part in the report while citing the law or regulation that requires the exception.
Why the Other Options Are Wrong
Option A: Treat every USPAP requirement as void for the assignment
Option A, treating every USPAP requirement as void, overstates the rule. Only the specific part of USPAP that the law precludes becomes void; the rest of USPAP still applies to the assignment.
Option C: Treat the client’s stated preferences as additional legal exceptions to USPAP
Option C, treating the client's stated preferences as additional legal exceptions, is wrong because a jurisdictional exception requires an actual law or regulation. A client preference or customary practice does not void any USPAP requirement.
Option D: Comply with the law but leave the conflict out of the report
Option D, complying with the law but leaving the conflict out of the report, fails the reporting duty. USPAP requires the report to clearly and conspicuously disclose the voided part and cite the law or regulation creating the exception.
Cut only the conflict
Picture a surgeon removing only the damaged part: the law cuts out the one conflicting USPAP piece, and the report shows the scar by disclosing it and citing the law.
How to use: Use this when a question asks how much of USPAP a conflicting law voids and what must be reported.
Exam Tip
Look for an answer that is narrow (only the precluded part), lawful (comply with the law) and transparent (disclose and cite). Answers that void all of USPAP or hide the conflict are wrong.
Common Mistakes to Avoid
- -Believing a conflicting law sets aside all of USPAP for the assignment
- -Treating a client's instructions as a jurisdictional exception
- -Following the law but not disclosing the voided part or citing the law in the report
Concept Deep Dive
Analysis
This question tests the Jurisdictional Exception Rule. When a real law or regulation precludes compliance with part of USPAP, the effect is narrow: only that part is void for that assignment, and the appraiser must still disclose the voided part and cite the law in the report.
Background Knowledge
The Jurisdictional Exception Rule preserves USPAP's integrity when a valid law or regulation conflicts with it. The exception is limited to the conflicting part, and transparency is achieved through disclosure of the voided part and citation of the legal authority.
Real-World Application
A local ordinance requires an appraiser serving a public body to follow a specific procedure that conflicts with one USPAP requirement. The appraiser follows the ordinance, complies with all other applicable USPAP requirements, and states in the report which USPAP requirement was voided and cites the ordinance.
More USPAP Questions
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According to USPAP, what is the primary purpose of the Ethics Rule?
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