Practice Test Geeks(CGA) Certified Gemologist Appraiser Practice Test
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Ethics Standards & Legal Compliance Flashcards

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Read the first 7 Ethics Standards & Legal Compliance flashcards as text

  1. A gemologist discovers mid-appraisal that they lack the expertise to properly grade an unusual colored gemstone. According to USPAP, the correct course of action is to:

    Answer: Acquire the necessary competency, disclose the limitation, or decline the assignment

    USPAP's Competency Rule requires appraisers to either gain competency before accepting the assignment, disclose limitations to the client, or withdraw from the assignment.

  2. In the context of estate appraisals, the IRS requires appraisals of donated property valued over $5,000 to be performed by:

    Answer: A qualified appraiser as defined by IRS regulations

    IRS regulations require that non-cash charitable contributions over $5,000 be appraised by a qualified appraiser who meets specific education and experience criteria.

  3. Which of the following best describes the ethical issue with 'appraisal shopping'?

    Answer: A client seeking multiple appraisals until finding one with the desired inflated value

    Appraisal shopping occurs when clients solicit multiple appraisals to find an appraiser willing to provide a desired value, undermining the integrity of the process.

  4. The Americans with Disabilities Act (ADA) requires jewelry appraisal businesses open to the public to:

    Answer: Provide equal access to services and remove barriers for customers with disabilities

    The ADA requires places of public accommodation to ensure equal access to their services and make reasonable accommodations for individuals with disabilities.

  5. When an appraisal is used for both insurance and charitable donation purposes, USPAP requires the appraiser to:

    Answer: Recognize that different intended uses may require different value definitions and methodologies

    Different intended uses of appraisals (insurance vs. donation) may require different value definitions, and a single report may not serve both purposes appropriately.

  6. A jewelry store owner asks their in-house gemologist to appraise estate jewelry the store is considering purchasing. What ethical issue does this present?

    Answer: A conflict of interest, since the appraiser's employer has a financial stake in the outcome

    When an appraiser's employer benefits financially from the appraisal outcome, an inherent conflict of interest exists that must be disclosed to all parties.

  7. Which of the following statements about the Kimberley Process Certification Scheme (KPCS) is accurate for US-based gem appraisers?

    Answer: It is an international certification scheme that restricts trade in rough conflict diamonds

    The Kimberley Process is an international government initiative to prevent conflict diamonds from entering the mainstream rough diamond market.