Gwen is in charge of accounting at Integrity Insurance Company. Integrity is a publicly-traded insurer. In describing her job, Gwen said, "There aren't too many businesses where you are required to keep two sets of books." Gwen's comment most likely refers to her company
A) preparing accounting statements using statutory and GAAP accounting.
B) preparing one set of records for the insurer's managers and another set for the policyholders.
C) preparing one set of books using dishonest values and another set using current market values.
D) preparing one set of accounting statements considering investment income and another set of accounting statements not considering investment income.

Question

Quizplus · Accepted Answer

The requirement to keep two sets of books likely refers to the preparation of accounting statements using statutory and GAAP accounting. Statutory accounting is required by state insurance regulators and focuses on solvency and maintaining reserves adequate to pay out claims. GAAP accounting, on the other hand, is used for financial reporting purposes and aims to present a company's financial position accurately and fairly to investors and other stakeholders. As a publicly-traded insurer, Integrity Insurance Company must comply with both statutory and GAAP accounting requirements.

Gwen Is in Charge of Accounting at Integrity Insurance Company