Why do Equipment Appraisal Reviews need to be objective?
For the same reason that appraisers need to remain objective in valuations, review appraisers need to develop and produce equipment appraisal reviews that are unbiased so that the assignment results are credible and defensible. When serving in the role of expert witness, the review appraiser needs to be objective in order to be effective in presenting arguments to support the reviewer’s conclusions. The Uniform Standards of Professional Appraisal Practice (“USPAP”) Ethics Rule states, “An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.” Appraisal review standards require reviewers to employ equality, base conclusions on facts, and present conclusions that are free from outside control. A proper review process objectively measures the work under review against logic and established appraisal industry standards.
Objectivity Through Deductive Reasoning
As one of the objective methods for deducting reasoning, the IRAC/CRAC paradigm helps the Reviewer analyze and communicate his or her conclusions in a way that is understandable to the intended user. This logical flow conclusions from factual premises allows the client to understand the issues discovered in the work under review, why the issue is important, and the rules governing the required components of appraisals.
CRAC communicates results through an outline of conclusions that logically follow factual premises. Using the CRAC model, the reviewer’s findings are reported as Conclusion (Issue), Rule, Analysis, and Conclusion. This structure walks the reader through one issue at a time (or grouping of similar issues) to explain the non-compliance when compared to the rule and provides recommended corrective actions to bring the work under review into compliance. To comply with the Appraisal Review requirements of USPAP Standards 3 and 4, the reviewer phrases compliance in terms of the work under review being complete, accurate, adequate, relevant, and reasonable.
Formal Education for Equipment Appraisal Reviews
The American Society of Appraisers offers the AR201 and AR204 courses to teach methods and techniques for performing USPAP-complaint appraisal reviews. These courses prepare the appraiser to critically and comprehensively analyze the work under review, which is necessary to competently report the reviewer’s findings in a way that is meaningful to the intended user. Tammy Blackburn, ASA and President of For What It’s Worth Appraisals Inc, has passed the exams for these courses and has 7 years of experience reviewing appraisals for tax appeal cases as a Special Magistrate. Contact us to learn more about how appraisal review services can provide valuable insight for your business decisions.
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