The OCBOA Alternative for Cash-Basis Compilations and Reviews

Best Practices to Save Time and Money

Recording of a 100-minute CPE webinar with Q&A

Conducted on Thursday, January 22, 2009

Course Materials

This seminar will help accounting firm professionals evaluate the advantages and disadvantages of OCBOA cash basis and modified cash basis alternatives for compilations and reviews.


In some circumstances, using an "other comprehensive basis of accounting" (OCBOA) rather than GAAP to prepare compilations and reviews for clients on a cash or modified cash basis makes good sense for companies that favor accrual accounting, and for their accounting firms.

When executed properly, OCBOA statements are easier than GAAP statements for corporate clients, their lenders, and other external users to understand. Due to their simplicity, OCBOA statements can save clients 20 to 30% in preparation time and expense.

However, OCBOA is not without its difficulties. Clarity of titles always bears careful attention, as does making sure disclosures parallel those in GAAP statements. The choice between cash basis and modified cash basis is key, and accountants must not modify so much as to essentially create GAAP.

Listen as our panel of accounting profession veterans helps you understand the challenges and leverage the benefits in using OCBOA to prepare compilations and reviews on a cash or modified cash basis.



  1. OCBOA Statements, Comparison And Contrast
    1. OCBOA statements
      1. Tax-basis
      2. Cash-basis
        1. Modified cash-basis
    2. Comparisons with GAAP statements
    3. Guidance available on OCBOA statements
  2. SAS No. 62 (special reports)
  3. Advantages And Disadvantages Of OCBOA Vs. GAAP
    1. Advantages
      1. Clarity for client compared with GAAP statements
      2. Clarity for external users
      3. Lower cost of preparation compared with GAAP statements
    2. Disadvantages
      1. Adequacy of disclosures
      2. Statement of cash flows not required
      3. Statement titles, notes may turn out improperly brief
      4. Modifications to standard audit reports needed when they will address OCBOA statements
  4. Particular Aspects Of OCBOA Cash Basis And Modified Cash Basis
    1. Recognition of certain revenue upon receipt
    2. Recognition of certain expenses when paid
    3. Use by both for-profit, non-profit entities
    4. Potential advantages
      1. Ease of reading
      2. Simplicity
      3. Cost advantages
    5. Potential disadvantages
      1. Need to avoid oversimplification of concepts
      2. Making sure final result doesn’t look like GAAP statement
  5. Practical Considerations
    1. Crafting clear titles, disclosures and notes
    2. Determining provisions of SAS No. 62 that need the most attention
    3. Deciding acceptable modifications to pure-cash basis accounting
    4. Evaluating cash vs. modified cash options
    5. Using OCBOA in situations where GAAP-basis statements aren’t necessary
    6. Crafting the policy note to financial statements


The panel will, with the help of scenarios presenting common difficulties in OCBOA, help you anticipate these and other common situations:

  • Crafting clear titles, disclosures and notes.
  • Determining the provisions of SSARS No. 15 that merit the most attention.
  • Identifying modifications to a "pure" cash basis of accounting that are acceptable, if equivalent to an accrual basis.
  • Evaluating cash vs. modified cash basis options, and avoiding modifications that effectively produce just a GAAP statement with some GAAP departures.


Gary O'Krent
Gary O'Krent
Bluestein O'Krent & Bluestein

He has taught courses on and written about OCBOA and is an AICPA peer reviewer. He is also on the California State...  |  Read More

Patrick Callahan
Patrick Callahan

Partner, Quality Review and Assurance
Goodman & Co.

He is the lead partner on financial statement review and risk management for nine firm offices. He has 37 years of...  |  Read More

Seid Sadat
Seid Sadat
Magidoff Sadat & Gilmore

He has more than 20 years of accounting and tax experience and specializes in audits and financial reporting for...  |  Read More

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