An appraiser stores workfiles entirely in electronic form. This is:
Correct Answer
C) Acceptable if the files are retrievable for the retention period
Electronic workfiles are acceptable if they contain the required supporting material and true report copies and remain retrievable for the full applicable retention period. A paper medium, fixed value threshold or client permission is not a universal USPAP condition for electronic storage.
Why This Is the Correct Answer
Option C is correct because USPAP requires that a workfile be stored in a medium that is retrievable by the appraiser throughout the prescribed record retention period. USPAP also states that an electronic copy of the entire report transmitted to the client satisfies the true-copy requirement. Electronic storage is acceptable when the required material is present and retrievable.
Why the Other Options Are Wrong
Option A: Acceptable for small assignments, but paper is required above a value threshold
Option A says electronic storage is fine for small assignments but paper is required above a value threshold. USPAP sets no value threshold that triggers a paper requirement; the test is retrievability and content.
Option B: Prohibited — USPAP requires a paper copy in the workfile
Option B says USPAP requires a paper copy in the workfile. USPAP permits documentation on any type of media, and an electronic copy can serve as the true copy of the report.
Option D: Acceptable once the client gives written consent, otherwise prohibited
Option D makes electronic storage depend on the client's written consent. Client permission is not a USPAP condition for electronic workfiles; the appraiser's duty is to keep the required material retrievable.
Retrievable Beats Paper
USPAP cares whether you can get the file back for the full retention period, not what medium it sits on.
How to use: Use this when a question asks about paper versus digital workfiles.
Exam Tip
Answers that add a paper requirement, a value cutoff or client approval to workfile storage are adding conditions USPAP does not impose.
Common Mistakes to Avoid
- -Thinking USPAP requires paper copies of reports
- -Ignoring whether old electronic files remain readable over the retention period
- -Assuming client consent is needed to store a workfile electronically
Concept Deep Dive
Analysis
This question tests whether a workfile may be kept entirely in electronic form. The Record Keeping Rule focuses on content and retrievability: the workfile must be stored in a medium the appraiser can retrieve throughout the retention period. An electronic copy of the transmitted report also satisfies the true-copy requirement.
Background Knowledge
The workfile must include items such as client and intended-user information, true copies of written reports, summaries of oral reports and documentation supporting the conclusions. The appraiser must keep it for the applicable retention period and maintain custody or access arrangements.
Real-World Application
An appraisal office goes paperless and stores workfiles on a cloud service. The owner sets up backups and checks that older files can still be opened, so the files remain retrievable throughout the retention period.
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