USPAP Exam 2024 with 100% Correct Answers, Exams of Accounting

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Appraisal standards history - Answer- Black Tuesday -- stock market crash of 1929 - The savings & loan crisis led to in 1986 a Ad Hoc Committee created USPAP (8 appr. organizations) and in 1987 The Appraisal Foundation Unified appraisal standards - Answer- Ad Hoc committee believed in creating a new organization to set the national standard --> USPAP (Uniform Standards of Professional Appraisal Practice) Title XI of FIRREA - Answer- - The reason federal agencies began to reference and ID USPAP in laws and regulations - This stated that RE appraisals be performed in a standardized manner - USPAP under TAF was a private entity --> public - Provides protection for federal financial and public policy interests in real estate related transactions --> Passed in response to loan and savings crisis Public expectations of appraisers - Answer- to be knowledgeable, experienced, objective, independent, and have integrity What is the TAF structure? - Answer- - Made up of 3 boards: 1) Board of Trustees (BOT) 2) Appraiser Qualifications Board (AQB) 3) Appraisal Standards Board (ASB) Appraiser Qualifications Board - Answer- under FIRREA, established minimum education and experience guidelines that states must use to issue appraisal licenses and certifications Appraisal Standards Board (ASB) - Answer- Develops, interprets, and amends the Uniform Standards of Professional Appraisal Practice (USPAP) - Does this on an as-needed basis (publish USPAP on a 2yr cycle) --> Advisory Opinions Board of Trustees - Answer- Has the power to: 1) Appoint members to AQB and ASB 2) Ensure TAF is funded 3) Monitor TAF, it's 2 boards (AQB & ASB), and it's 2 Advisory Councils (IAC & TAFAC) Exposure drafts - Answer- - used when ASB is interested in making potential changes to USPAP Where do outside suggestions for changes to USPAP originate? 1) ASB received comments & suggestions 2) consults with TAF, it's associated members and organizations 3) organizations & interested parties (TAF sponsors) are consulted 4) Input from the public 5) Before ASB issues the first ______ on changes, it receives info from sources 6) Once ASB picks changes, they write down proposed edits in a communications called ______ 7) ASB publishes and then gives public time to make comments 8) Issues an amended draft 9) VOTING at a public meeting *****Rationale (if moving forward with changes, ASB exposes revisions for public for a minimum of 30 days (3-5 drafts)) The Appraisal Subcommittee - Answer- The government oversight entity charged with ensuring appraiser compliance with the federal laws. Their mandate includes, monitoring the FFIRA, states, and the Appraisal Foundation for compliance with Title XI, and maintaining the national registry of appraisers eligible to appraise FRT's. The Structure of USPAP - Answer- 1) Preamble 2) Definitions 3) Rules (ethics, record keeping, SOW, etc) 4) Standards 5) Statements 6) Other communication (Advisory opinions, FAQ, Index to USPAP Public, and Q&As) USPAP is structured to follow what process? - Answer- Appraisal Process --- 1. ID the problem 2. Scope of work 3. Data and analysis 4. approaches to value 5. reconcile value and opinion 6. report of defined value What is the preamble? - Answer- declaration of general purpose of USPAP Definitions - Answer- explains the terms used in USPAP - Do NOT be misleading STANDARDS 3 - Answer- - Appraisal Review info o Reviewer doesn't have to replicate original steps o Reviewer may use additional info BUT not info that discredits original value - Two stage appraisal review - reviews and reviewers' own opinion of value Two-stage appraisal review - Answer- includes reviews and reviewers' own opinion of value STANDARDS 4 - Answer- - Content of appraisal review/general requirements - Reviewer is not required to cite USPAP in violations reviewed, must include reasons for disagreement in report - Certification of review report - 1. Doesn't have to match verbatim 2. Signing reviewer must sign certification if signed review report 3. Signing reviewer is responsible for decision 4. If certification doesn't have all elements, report must have supplemental certification STANDARDS 5 - Answer- - Mass Appraisal Development - Mass appraisal is the process of valuing properties at a date using method, data, and statistics - Mass appraisal model is the mathematical expression of how supply and demand interact in a market Mass appraisal - Answer- the process of valuing properties at a date using method, data, and statistics STANDARDS 6 - Answer- - Mass Appraisal Reporting - Pertains to written communications in mass appraisals (Ad valorem = according to value) - content and level of information STANDARDS 7 - Answer- - Personal Property Appraisal Development STANDARDS 8 - Answer- - Personal Property Appraisal Reporting - Opinion of appropriate market/market level STANDARDS 9 - Answer- - Business Appraisal Development - Development of a business or intangible asset appraisal o Is subject interest a controlling or non-controlling interest (more common in a business appraisal vs. real) - Premise of value - liquidation of all/part of enterprise may increase value - Approaches to value - appraiser should look at prospective, retrospective, and current of business enterprise; must analyze past sales of capital stock/other ownership STANDARDS 10 - Answer- - Business Appraisal Reporting - Requires signed certification, EXCEPT don't need to include an inspection Workfile - Answer- - An appraiser must prepare a workfile for each appraisal/appraisal review - Appraiser must retain for at least 5 years after preparation or greater than 2 years after deposition Advisory Opinions - Answer- - developed by ASB - Not a part of USPAP, but considered other communications - Guidance from ASB to show applicability of appraisal standards in specific situations and offer advice to issues/problems AO 30 - Answer- Addresses Appraisal for use by a federally regulated financial institution - USPAP applicability: If a federal institution asks you to perform an appraisal, you are expected to conform to applicable regulations and guidelines - Obligation: Independence, appraisal dev. and reporting, market value definition AO 31 - Answer- addresses assignments involving more than 1 appraiser - an appraiser who signs any part of the report must sign the certification AO 33 - Answer- Covers discounted cash flow analysis - capitalization - converting income into value via direct cap; future benefits are converted into value by discounting them at appropriate yield rate AO 34 - Answer- Retrospective and prospective value opinions - 2 dates essential to to report -- effective date and date of report AO 35 - Answer- Reasonable exposure time in real property and personal property opinions of value - exposure time is inherent in market value and expected to be before effective date AO 36 - Answer- ID and disclosure of client, intended use/users AO 37 - Answer- Computer assisted valuation tools AO 38 - Answer- Content of appraisal report and restricted appraisal report