Firm $1.$ This is a U$.$S$.$ steel manufacturer that had several years of troubling financial performance but is now under new management. The new management says two factors are creating positive momentum so that the first earnings announcement that will reflect the new management's performance$-$which will be next year's earnings$-$will be much stronger than the current year. The two factors cited by management are new big tractor$/$steamroller construction booms due to infrastructure repair, as well as the new tariffs on foreign$-$produced steel. Together these two will enable their future performance to really shine positively. The audit partner thinks this story is pretty reasonable, but also worries that management is taking a "big bath" on purpose this reporting period, and that true performance this year is much better. By taking a big bath this year, management

can "save" those earnings for next year.