Quality Assurance & Compliance Flashcards
7 cards from real BCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Quality Assurance & Compliance flashcards as text
A business appraiser is asked to perform a desk review of another appraiser's report. The desk review should be performed in accordance with:
Answer: USPAP Standards Rules 3 and 4
USPAP Standards Rules 3 and 4 govern appraisal review, which includes desk reviews of business appraisal reports.
Which of the following is NOT an acceptable reason for an appraiser to deviate from a typical appraisal approach in a business valuation?
Answer: The client prefers a higher value outcome from a specific approach
Client preference for a higher value is never a legitimate reason to omit or deviate from an applicable approach, as it would compromise independence.
Under the BCA credential standards, a compliance officer reviewing an appraisal report should check that the report contains all of the following EXCEPT:
Answer: A guarantee that the concluded value will not change
Appraisers cannot and must not guarantee value conclusions; reports must be presented as professional opinions, not guarantees.
A business appraiser with a conflict of interest who fails to disclose it to the client is most directly violating the USPAP Ethics Rule section on:
Answer: Conduct
The Conduct section of USPAP's Ethics Rule requires appraisers to disclose conflicts of interest that could compromise impartiality.
When reviewing a business appraisal for compliance, which area is MOST critical to verify under the income approach?
Answer: Support for the selected discount or capitalization rate
The discount or capitalization rate is the most sensitive assumption in the income approach and must be well-supported to withstand quality review.
A BCA appraiser preparing a restricted appraisal report must ensure that:
Answer: The report is only provided to and intended for use by the client
A restricted appraisal report is intended only for the client and cannot be understood without additional information held in the workfile.
Which of the following best describes a 'material' error in a business appraisal report for compliance purposes?
Answer: An error that would cause a reasonable user to reach a different conclusion
A material error is one that, if corrected, would likely change the conclusions or decisions of a reasonable intended user.