Super Micro melts like ice cream under sun
Super Micro's stock dropped 33% on Wednesday after the company stated its auditor had resigned
Super Micro’s stock dropped 33% on Wednesday after the company stated its auditor had resigned following months of conflict with the company over board independence and governance.
In their letter of resignation, Ernst & Young expressed their “unwillingness to be associated with the financial statements prepared by management,” The accountant also raised concerns about the board’s independence from “other members of management”
the firm earlier declared that it had selected EY for its initial audit for the 2024 fiscal year. Super Micro has not yet disclosed its financial figures for this year and is reportedly the focus of a federal investigation.
Super Micro appointed a special board committee to investigate the company’s internal controls after the auditor initially raised concerns about the company’s internal financial controls, governance, and forthcomingness in late July.
In its resignation letter, EY stated, “We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management’s and the Audit Committee’s representations.” Before a short seller report criticized Super Micro’s accounting and financial procedures.”
Computers manufactured by Super Micro are used by businesses as servers for websites, data storage, and other applications, such as algorithms for artificial intelligence. the business customers include well-known AI companies like Nvidia.
Super Micro has already encountered issues with regulators due to its accounting procedures. In 2020, it settled a $17.5 million penalty with the Securities and Exchange Commission, which accused it of recording revenue incorrectly and prematurely.
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