Two sets of financial accounting standards are generally accepted accounting principles (GAAP) and statutory accounting practices (SAP). One true statement about these financial accounting standards is that

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Health plans are required to prepare their financial statements according to applicable laws, regulations, and accounting principles, particularly GAAP. While both GAAP and SAP are important sets of accounting standards, GAAP is generally considered the most important for health plans to follow in order to provide useful and reliable financial information to external users. Additionally, GAAP is established by the Financial Accounting Standards Board (FASB), a private organization that sets accounting standards for all types of businesses in the United States.

Two Sets of Financial Accounting Standards Are Generally Accepted Accounting