According to IVSC (2017), standard may be defined as a measure serving as a principle to which others conform or should conform and by which the accuracy or quality of the work of the professional performance of others is judged. This definition can encompass a very wide range of requirements from a high level, such as “The Valuer will normally estimate Market Value by considering the highest and best use of the property as improved” to the detailed ‘the Valuer must … indicate the annual effective rate at which periodic interest is calculated. ‘Standards’ has several meanings and the reasons why valuation standards are needed were given as follows:
- Standards are required to provide consistency and comparability of valuations.
- Standards should provide a consistent valuation approach in similar circumstances and which is readily available and understood by users and Valuers and relevant to the purpose of the valuation, and
- Standards should assist the Valuer in setting out and agreeing with the user the terms under which valuations will be provided.
- Standards provide a measure of the performance of a competent practitioner.
On her part, the Uniform Standards of Professional Appraisal Practice (USPAP) provides that ethical standards for valuation should be in the following four areas (USPAP, The Appraisal Foundation, 2002 Edition, Ethics Provision, page 7):
- Conduct: Acting as a disinterested third party, the assignments should be performed with unbiased impartiality, objectivity and independence. Any action should be avoided which may be considered misleading or fraudulent or to knowingly permit an employee to communicate a misleading or fraudulent report. …
- Management: Acceptance of compensation that is contingent on reporting a predetermined value or direction in value, attainment of a stipulated result, or the occurrence of a subsequent event is unethical.
- Confidentiality: An appraiser must protect the confidential nature of the appraisal assignment.
- Record keeping: An appraiser must prepare written records (data and information to support the findings and conclusions) …and retain such records for a period of at least five years after preparation or at least two years after final disposition of any judicial proceeding involving those records, whichever expires last.
