USPAP Standards and Ethics
USPAP Standards and Ethics
This domain tests USPAP as applied to personal property: Standard 7 development, Standard 8 reporting, the Ethics Rule, Competency Rule, Scope of Work Rule, and Record Keeping Rule. It also tests review under Standards 3 and 4.
Core rules
- Standard 7 governs development of a personal property appraisal: identify the problem, determine and disclose scope of work, gather and analyze data, apply the approaches, and reconcile to a value opinion.
- Standard 8 governs reporting: state the problem, scope, data, analysis, and conclusion in a way intended users can understand.
- Standards 3 and 4 govern appraisal review development and reporting: identify the review problem and scope, form an opinion about the work under review, and support it.
- Ethics Rule: remain impartial, objective, and independent. Do not misrepresent. Compensation cannot be contingent on a value conclusion, a direction in value, or a predetermined result.
- Competency Rule: accept only work you can complete competently, or disclose the lack of knowledge or experience, take steps to acquire competency, and disclose that in the report. If you cannot become competent, withdraw.
- Scope of Work Rule: the scope must be sufficient for the intended use and intended users; disclose research, inspection, and analysis actually performed.
- Disclose extraordinary assumptions and hypothetical conditions; use a jurisdictional exception only when a law or regulation conflicts with USPAP.
- Keep a workfile for at least five years after delivery, or two years after final disposition of a judicial proceeding in which testimony was given, whichever is later.
Worked example
A client asks for a silver appraisal for insurance and offers a bonus if the value exceeds $50,000. Decline the contingent fee. Clarify insurance replacement value, intended users, and effective date. If competent in silver, document maker, marks, weight, condition, and retail comparables; otherwise disclose the competency gap or refer. Report the value you support, not the value the client wants.
Traps
Accepting a value-contingent fee; using fair market value without defining it; omitting scope; failing to disclose an extraordinary assumption; skipping the workfile; treating a review as a new appraisal without saying so.