What must a report disclose about the extent to which the appraiser relied on another professional's work?
Correct Answer
D) What was relied upon and the extent of reliance
Why this is correct: The report must contain sufficient information for intended users to understand it (SR 2-1(b)) and must disclose the scope of work performed (Scope of Work Rule, disclosure obligations). When the appraiser relies on another professional’s work (e.g., an engineer’s report), the report should identify what was relied upon and the extent of that reliance so readers can assess the support for the conclusions; under SR 2-3(c) the signing appraiser remains responsible for the decision to rely on that work. Why the other choices are wrong: Licensure of the other professional does not remove the disclosure need. The cost of engaging the professional does not inform the reader about the nature of reliance. A name and license number alone do not convey what was relied upon or to what extent. Exam tip: Disclose both the what and the how much when relying on another expert’s work.
Why This Is the Correct Answer
Option D is correct because SR 2-1(b) requires sufficient information for intended users to understand the report, and the scope of work performed must be disclosed. Identifying what was relied upon and the extent of reliance lets readers judge the support for the conclusions, and under SR 2-3(c) the signing appraiser remains responsible for the decision to rely on that work.
Why the Other Options Are Wrong
Option A: Nothing, provided that professional was licensed
Option A, disclosing nothing provided the professional was licensed, is wrong because licensure does not remove the need to tell readers what the appraiser relied on and to what extent.
Option B: Only the total cost of engaging that professional
Option B, disclosing only the total cost of engaging the professional, does not tell the reader what work was relied upon or how much it shaped the conclusions.
Option C: The name and licence number of the professional
Option C, the name and licence number of the professional, identifies a person but does not explain what was relied upon or the extent of that reliance.
What and how much
When leaning on another expert, the report states what you leaned on and how much weight you put on it.
How to use: Use this when a question asks what to disclose about reliance on outside professionals.
Exam Tip
Pick the answer that helps intended users understand the basis of the conclusions; credentials or fees alone do not do that.
Common Mistakes to Avoid
- -Assuming a licensed expert's work needs no disclosure
- -Listing only the expert's name and credentials
- -Believing reliance shifts responsibility away from the signing appraiser
Concept Deep Dive
Analysis
This question tests reporting when an appraiser relies on another professional's work. The report must give intended users enough information to understand it and disclose the scope of work, which means identifying what was relied on and how far that reliance went.
Background Knowledge
Appraisers often rely on engineers, environmental consultants or other experts. USPAP requires the report to communicate that reliance clearly so users understand the basis of the opinions, and the signing appraiser stays responsible for choosing to rely on the work.
Real-World Application
An appraiser valuing an older house relies on a structural engineer's report for the cost to cure foundation problems. The report identifies the engineer's report, explains that the cost-to-cure figure came from it, and describes how it was used in the depreciation analysis.
More USPAP Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
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An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
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