Neutral/Bass Treble?

when you listen to speakers my friend said you should always set the amplifier to neutral meaning the BASS straight up 12.O'clock the TREBLE as well straight up 12:00 O'clock and then put in a CD and listen but never ajust the BASS or TREBLE is this true? and if it sound BAD then the SPEAKERS are BAD? Shouldn't I be adjusting the BASS and TREBLE for each CD recording?
The amplifier itself or anything else along the signal path from the CD Player to the speakers can be "bad" as you say, so do not assume it is the speakers. Most better equipment has a tone cutoff switch to make it neutral or mostly has no tone controls at all. I have always listened using neutral controls (if there are controls), but if it sounds good to you moving the controls go ahead. Nothing wrong with that.
With modern, well done recordings, there is generally no need to use tone controls if you have a harmoniously integrated system. BUT, I sure do find that a number of older recordings from 20+ years back benefit from slight adjusments. Personally, on "thin" sounding old recordings, I think the slight loss of transparency resulting from engaging the tone controls is more than comensated for by the enhanced harmonic richness.
PS: I do use the balance control a lot with LP records. They are sometimes a little out of balance.