Cubbies Cable Essays

653 Words Sep 12th, 2012 3 Pages
Cubbies Cable
The ethical dilemma in the “Cubbies Cable” case is whether or not Binks should go along with the client's and firm's position in expensing all of its construction costs. Binks, the partner in charge of the audit, is aware his firm, Santos & Williams, operates with the philosophy that “you have to let the client win one somewhere along the line or you may lose that client.” His firm, and advisory partner, Rod Hondley, both agree with the client's position to expense all of its construction costs. This isn't the first time for Binks to have a dispute with its client.
In the client's first dispute, I disagree with its position to not disclose the possibility of a loss. Cubbies argued “there was nothing to confirm the CPA
…show more content…
With respect-for the stakeholders, including the creditors, customers, suppliers, public, regulators, workers, and owners, Binks' decision on whether to support or to influence the client's position will affect several people involved with the company. In this ethical dilemma, if Binks chooses to support his firm, his integrity and objectivity his compromised. In contrast, if Binks chooses to try to influence the accounting firm to change its position, hopefully his firm has someway to handle differences in opinions. Needless to say, auditing firms don't have an audit committee or board of directors like the client does. Cubbies, a privately owned family business, would usually be asked to recourse the matter with its board of directors, but in this case, 9 of the 11 members are said to be family of the CEO or past officers of the company. Blair & Santos already expect the situation to not work in its favor and its prepared tactics to “work with the client” are not in accordance with GAAP; according to the Statement of Financial Accounting Standards No. 51, “Financial Reporting by Cable Television Companies,” requires that cable television plant costs incurred during the prematurity periods be capitalized in full.
If I were in Binks position, I would do my best to try to influence my firm to change its position. I would go to any “higher-up” in hopes of resolving this issue. I would not want to work for a

Related Documents