In 1979, the SEC adopted a safe-harbor rule for companies that issue prospective information. In 1981, the SEC amended its safe-harbor rule to cover projections contained in certain reports. Thus, the SEC encourages companies to prepare and disseminate forward-looking information. This study was conducted with a comprehensive questionnaire. Practicing CPAs from large firms were selected in the sample for this study.
Large entities are more likely than small entities to provide prospective financial information.
Thus, large CPA firms are assumed to be more frequently involved with such information. Ten of the largest national CPA firms were contacted and agreed to participate. Table 1 summarizes the extent of respondents' experience with prospective financial information services. Slightly less than half of the respondents indicated they performed a compilation or an examination of the prospective financial information for at least one client in 1986. The study also analyzed how such chargeable hours were distributed over different levels of auditor experience in the firms.