Which accounting system is characterized by statutory requirements?

The correct answer highlights an accounting system that is defined by statutory requirements, primarily because it is used for regulatory reporting. This system is typically employed in the insurance and financial services industries, where companies must comply with laws and regulations set by governmental bodies.

STAT (Statutory Accounting Principles), SAP (Statutory Accounting Practices), and RAP (Regulatory Accounting Principles) are designed specifically to meet the requirements imposed by regulatory authorities. These principles prioritize solvency and financial stability, ensuring that organizations maintain adequate reserves and adhere to specific financial reporting standards for the protection of policyholders and the market.

In contrast, other accounting systems, such as tax accounting or managerial accounting, are generally focused on specific purposes that do not require compliance with statutory standards. While GAAP (Generally Accepted Accounting Principles) is an important framework for financial reporting, it is not solely dictated by statutory requirements. Instead, GAAP aims to enhance the consistency and transparency of financial reporting across various industries.

Therefore, the choice that accurately reflects an accounting system grounded in statutory obligations is the one that specifically includes regulations imposed by governing authorities, making it the best fit for the question asked.