AHIP Exam AHM-520 Topic 5 Question 9 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 9
Topic #: 5

All publicly traded health plans in the United States are required to prepare financial statements for use by their external users in accordance with generally accepted accounting principles (GAAP). In addition, health insurers and health plans that fall under the jurisdiction of state insurance departments are required by law to prepare certain financial statements in accordance with statutory accounting practices (SAP). In a comparison of GAAP to SAP, it is correct to say that:

AGAAP is established and promoted by the National Association of Insurance Commissioners (NAIC), whereas SAP is established and promoted by the Financial Accounting Standards Board (FASB)

BThe going-concern concept is an underlying premise of GAAP, whereas SAP tends to focus on the liquidation value of the MCO or the insurer

CGAAP provides for a single method of valuing all of a health plan's assets, whereas SAP offers the health plan more than one method for valuing its assets

DThe principle of conservatism is fundamental to GAAP, whereas SAP generally is not conservative in nature

Show Suggested Answer

Suggested Answer: B

by Lawrence at May 06, 2022, 09:05 PM

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