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Glossary/Accounting and GAAP

Special purpose framework (OCBOA)

A special purpose framework is a financial reporting basis other than GAAP, such as cash, tax, or regulatory basis, designed to meet the needs of specific users and audited under AU-C 800.

CORAA TeamUpdated November 5, 2026

Definition

A special purpose framework (formerly called other comprehensive basis of accounting, or OCBOA) is a financial reporting framework designed to meet the financial information needs of specific users. AU-C 800 identifies common types: the cash basis, tax basis, regulatory basis, contractual basis, and other bases with substantial support. Statements under these frameworks are not GAAP.

Why it matters in an audit or review

The auditor determines acceptability of the framework, which must be suitable for the intended users, and confirms that management describes the basis in a note, including how it differs from GAAP where relevant. The report heading, management's responsibility paragraph, and opinion refer to the framework, and an emphasis-of-matter paragraph alerts readers that the statements are prepared under a special purpose framework and may not be suitable for another purpose. Restricted-use language may be needed for contractual or regulatory bases. Audits of a single financial statement, or of a specific element, account or item of a statement, fall under AU-C 805.

Example

A subsidiary prepares statements under a loan agreement that defines revenue and depreciation differently from GAAP (illustrative). That is a contractual basis. The auditor reads the agreement, tests compliance with its definitions, and issues a report that names the contractual basis and restricts distribution to the parties.

Common mistakes

  • Treating "OCBOA" as a loophole to skip disclosures; notes are still required.
  • Omitting the basis-of-accounting paragraph in the report.

Sources

  • AICPA, AU-C Section 800, Special Considerations: Audits of Financial Statements Prepared in Accordance With Special Purpose Frameworks
  • AICPA, AU-C Section 805, Special Considerations: Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement

Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error

Standards

AU-C 800

Related terms

  • Cash basis accounting
    Cash basis accounting records revenue when cash is received and expenses when cash is paid; it is not US GAAP, but can serve as a special purpose framework with proper disclosure.
  • Income tax basis of accounting
    Income tax basis financial statements follow the rules the entity uses to compute taxable income, a common special purpose framework for partnerships and small businesses that do not need GAAP statements.
  • Accrual basis accounting
    Accrual basis accounting records revenue when earned and expenses when incurred, regardless of when cash moves, and is the foundation of US GAAP financial statements for operating entities.

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