The OCBOA Alternative for Tax-Basis Compilations and Reviews

Best Practices to Avoid Oversimplification Risks While Leveraging Time and Cost Benefits

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

Conducted on Thursday, September 25, 2008

Course Materials


Under some circumstances, using an "other comprehensive basis of accounting" (OCBOA) rather than GAAP to prepare compilations and reviews on a tax basis makes good sense for both clients and 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 downside. Professionals working on compilations and reviews must take care to ensure their titles are sufficiently clear, disclosures parallel those in GAAP statements, and accompanying notes convey all risks and uncertainties.

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 tax 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
      1. SAS No. 62 (special reports)
  2. 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
  3. Practical Considerations
    1. Using OCBOA in situations where GAAP-basis statements aren’t necessary
      1. E.g. because of loan covenants, regulatory requirements
    2. When to include non-taxable revenue, non-deductible expenses in statements
    3. Making OCBOA disclosures parallel those in GAAP statements, or communicate the same information
      1. Following the same disclosure requirements under OCBOA as GAAP
    4. Making acceptable modifications to the pure cash basis of accounting
      1. Avoiding going too far with modifications
    5. Modifying titles to OCBOA financials to show the accounting basis
    6. When GAAP-basis captions can be used within OCBOA financials
    7. Crafting the policy note to financial statements
    8. Making the necessary notations in audit, review and compilation reports


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

  • How to craft clear titles, disclosures and notes.
  • Which key provisions of Statement on Auditing Standards No. 62 (SAS No. 62) merit the most attention.
  • When to include non-taxable revenue and non-deductible expenses in the statements.
  • How to restate financial statements after converting from GAAP to an OCBOA approach.


David Riley
David Riley
Schlenner Wenner & Co.

At the firm, his focus is on auditing, litigation and valuation services.

 |  Read More
David Bolton
David Bolton
Cherry Bekaert & Holland

He has more than 30 years of experience and provides accounting and audit services to commercial and not-for-profit...  |  Read More

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

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