When is an appraiser required to disclose the scope of work performed?
Correct Answer
D) In all appraisal reports
An appraisal report must communicate enough about performed scope for intended users to understand it. The detail and manner depend on intended use and reporting option; no special heading is mandatory, and disclosure is not limited to an unusually narrow scope or a client request.
Why This Is the Correct Answer
Option D is correct because the report must contain sufficient information to allow the client and other intended users to understand the scope of work performed. This applies to appraisal reports generally, including both Appraisal Reports and Restricted Appraisal Reports. Only the detail and manner of the disclosure vary with the reporting option and intended use.
Why the Other Options Are Wrong
Option A: When specifically requested by the client
Option A says disclosure is required only when specifically requested by the client. The duty arises from USPAP's disclosure obligation for reports, not from a client request.
Option B: In Appraisal Reports but not Restricted reports
Option B says disclosure is needed in Appraisal Reports but not Restricted reports. A Restricted Appraisal Report still must allow its intended users to understand the scope of work, though the level of detail may differ.
Option C: Only when the scope is limited
Option C limits disclosure to cases where the scope is limited. Scope of work must be communicated regardless of whether the scope is broad or narrow.
Identify, perform, disclose
The Scope of Work Rule follows three verbs in order: identify the problem, perform the necessary work, and disclose that work in the report. Disclosure is the last step of each assignment, not an optional extra.
How to use: Use this to recall that scope disclosure belongs in each appraisal report.
Exam Tip
Watch for options that tie a reporting duty to a client request or to an unusual circumstance; USPAP disclosure duties generally attach to the report itself.
Common Mistakes to Avoid
- -Thinking Restricted Appraisal Reports need no scope of work description
- -Disclosing scope only when the inspection or research was limited
- -Believing a special scope of work heading is mandatory
Concept Deep Dive
Analysis
This question tests the scope of work disclosure obligation. USPAP requires that each appraisal report contain enough information for the client and other intended users to understand the scope of work performed. The level of detail varies with the intended use and reporting option, but the obligation itself is not triggered by a request or a narrow scope.
Background Knowledge
The Scope of Work Rule has three parts: identify the problem, determine and perform the scope of work necessary for credible results, and disclose the scope of work in the report. Disclosure lets intended users understand what was and was not done so they are not misled. No specific heading or format is mandated.
Real-World Application
An appraiser prepares a Restricted Appraisal Report for a sole client deciding whether to sell. The report briefly states that an exterior-only inspection was performed and which data sources were researched, so the client understands what work supports the value opinion.
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