An appraiser is offered her first-ever going-concern assignment on a marina. Under the Competency Rule she may accept only if she:
Correct Answer
C) Discloses the gap, then gains the competency or brings in help
Why this is correct: The Competency Rule provides a three-step path: 1) disclose the lack of knowledge or experience to the client before acceptance, 2) take steps to become competent (e.g., study, associate with an expert), and 3) describe in the report the steps taken to complete the assignment competently. Why the other choices are wrong: A liability waiver does not satisfy USPAP. A college course is not the only way to gain competency. A reduced fee does not address the competency requirement. Exam tip: You can accept an assignment outside your experience if you disclose, get competent, and report how you did it.
Why This Is the Correct Answer
Why this is correct: The Competency Rule provides a three-step path: 1) disclose the lack of knowledge or experience to the client before acceptance, 2) take steps to become competent (e.g., study, associate with an expert), and 3) describe in the report the steps taken to complete the assignment competently. Why the other choices are wrong: A liability waiver does not satisfy USPAP. A college course is not the only way to gain competency. A reduced fee does not address the competency requirement. Exam tip: You can accept an assignment outside your experience if you disclose, get competent, and report how you did it.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
If an appraiser uses a hypothetical condition that the subject property is 10% larger than it actually is, this must be:
Under Standard 1, when developing a real property appraisal, an appraiser must:
An appraiser accepts an assignment to appraise a specialized industrial property but has never appraised this property type before. To comply with the Competency Rule, the appraiser:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
A lender emails: 'We need at least $450,000 to make this loan work — can you take the assignment?' Accepting on that basis is:
An appraiser is developing an opinion of market value for a 20-unit apartment building. The appraiser finds three comparable sales with the following information: Sale 1: 18 units, sold for $1,800,000; Sale 2: 22 units, sold for $2,200,000; Sale 3: 24 units, sold for $2,280,000. What is the average price per unit for these comparables?
In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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