1. What do you think was the motivation for Cubbies Cable in taking the position to expense all cable costs during the nine months ended September 20, 2010? Would you characterize the position as an attempt to manage earnings? Why or why not? 2. Who are t

1. What do you think was the motivation for Cubbies Cable in taking the position to
expense all cable costs during the nine months ended September 20, 2010? Would you
characterize the position as an attempt to manage earnings? Why or why not?
2. Who are the stakeholders in this situation? Identify the major ethical issues that should
be of concern to Binks in deciding whether to just go along with the firm in its support of
the client, or to take some other action. What would you do at this point if you were in
Binks’s position? Why?
3. Would you question the company’s integrity in this situation given that Cubbies did agree
with the firm on the issue of capitalizing interest during the prematurity period? In other
words, should CPAs be prepared to “horse trade” when dealing with a client about the
proper GAAP to apply in a particular situation?