An appraiser is developing a narrative report for a complex commercial property. The client requests that certain approaches to value be excluded. How should the appraiser handle this request?
Correct Answer
C) Determine scope of work based on what is necessary and appropriate
Under USPAP, the appraiser must determine the appropriate scope of work based on what is necessary to produce credible results, not client preferences. The scope of work decision must be disclosed and supported in the report.
Why This Is the Correct Answer
CORRECT_ANSWER - Option C correctly reflects USPAP's Scope of Work Rule, which mandates that appraisers determine the appropriate scope of work based on what is necessary and appropriate to develop credible assignment results. The appraiser must exercise independent professional judgment in determining which approaches to value are needed, regardless of client preferences. This decision must be disclosed in the report along with the reasoning behind the scope of work choices. The appraiser's primary obligation is to produce credible results, not to satisfy client preferences that might compromise the assignment's reliability.
Why the Other Options Are Wrong
Option A: Comply with the client's request to maintain the relationship
This violates USPAP's independence requirements and could constitute client accommodation that compromises credible results. Maintaining client relationships cannot supersede professional standards.
Option B: Include all approaches regardless of client preference
While thoroughness is important, USPAP doesn't require all three approaches in every assignment - only those necessary for credible results based on the specific property and assignment conditions.
Option D: Use only the approach that supports the client's expectations
This represents advocacy and bias, directly violating USPAP's objectivity and independence requirements. Supporting client expectations rather than developing credible results is unethical.
SCOPE Independence Rule
Remember 'SCOPE' - Scope determined by Credibility needs, Objectivity maintained, Professional judgment rules, Explained in report. The appraiser's SCOPE decisions must be independent of client preferences.
How to use: When you see questions about client requests to modify scope of work, immediately think 'SCOPE' and remember that credibility needs and professional judgment trump client preferences every time.
Exam Tip
Any time a question involves client pressure or requests that could affect the appraisal scope or conclusions, the answer will always favor professional independence and USPAP compliance over client accommodation.
Common Mistakes to Avoid
- -Prioritizing client relationships over USPAP compliance
- -Assuming all three approaches are always required
- -Failing to properly disclose and support scope of work decisions
Concept Deep Dive
Analysis
This question tests understanding of USPAP's Scope of Work Rule, which requires appraisers to determine and perform the scope of work necessary to develop credible assignment results. The appraiser must maintain independence and objectivity, making professional judgments about what approaches and methods are appropriate for the specific assignment. Client preferences or desires cannot override the appraiser's professional responsibility to develop credible results. The scope of work decision must be based on the complexity of the assignment, the intended use, and what is necessary to produce reliable conclusions.
Background Knowledge
USPAP's Scope of Work Rule requires appraisers to determine and perform the scope of work necessary to develop credible assignment results, based on professional judgment rather than client preferences. The appraiser must maintain independence and objectivity throughout the assignment, disclosing and supporting all scope of work decisions in the report.
Real-World Application
In practice, clients may request excluding certain approaches to save costs or time, but appraisers must resist if those approaches are necessary for credible results. For example, if a client wants to exclude the cost approach for a special-purpose property where it's essential, the appraiser must include it and explain why it's necessary in the scope of work disclosure.
More Report Writing Questions
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What is the minimum transaction threshold for requiring a state licensed or certified appraiser under Title XI for most federally related transactions?
The Dodd-Frank Act established which requirement specifically related to appraisal independence?
Which of the following is NOT a responsibility of the Appraisal Subcommittee (ASC)?
State appraiser regulatory agencies are primarily responsible for which of the following functions?
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