Unlike his U.K. counterpart, who opines on a ‘true and fair view’, the more limited objective of the U.S. Certified Public Accountant is to certify that financial statements present fairly ‘in conformity with generally accepted accounting principles’. Generally accepted accounting principles, as applicable to proprietary life insurance companies, are set out in the American Institute of Certified Public Accountants Audit Guide ‘Audits of Stock Life Insurance Companies’ (1) (hereafter referred to as the ‘Audit Guide’). Despite being neither general in application nor universally accepted, it is these accounting principles which are commonly known as U.S. GAAP.

U.S. GAAP are relevant to U.K. actuaries because:

(a) Many actuaries work for, or with, life insurance subsidiaries of U.S. companies which are required to prepare financial statements in accordance with U.S. GAAP

(b) More generally, on the grounds that developments in the U.S. often precede similar developments in the U.K., we should anticipate the possible development of U.K. generally accepted accounting principles (or even EEC GAAP).