NEW YORK — After Ernst & Young’s resignation as its auditing firm, Super Micro Computer has announced the findings of a review committee indicating there was no evidence of fraud or inappropriate conduct among its executives.
Super Micro is currently in the process of appointing a new chief financial officer along with other executives in line with the committee’s recommendations. This review was initiated several months back after Ernst & Young raised issues regarding transparency, management integrity, and internal financial reporting controls during their first audit.
The conclusions from this review ultimately led to Ernst & Young’s resignation from their role as Super Micro’s public auditor last month, a decision that Super Micro disagreed with. Subsequently, the company appointed BDO as its new independent auditor.
The board’s committee, along with external legal counsel, completed its review this Monday. Super Micro asserted that the issues cited by Ernst & Young in their resignation letter were not substantiated by the outcomes of this investigation, reaffirming that no misconduct was found.
Consequently, Super Micro does not anticipate any restatement of its previous financial reports. Following this news, the company’s shares surged by over 20% early Monday.
In addition to the review’s findings, Super Micro outlined its strategy for new leadership appointments, as suggested by the committee. They shared that they’re actively seeking a new CFO while David Weigand will continue in this role until a successor is appointed. Furthermore, the company plans to expedite its search for both a chief compliance officer and a general counsel.
Kenneth Cheung, who is currently the vice president of finance and corporate controller, has been elevated to the position of chief accounting officer.
This has been a challenging year for Super Micro, as EY’s resignation marks just the latest controversy surrounding its accounting practices. In August, Hindenburg Research released a report alleging significant accounting fraud, indicating serious discrepancies and undisclosed transactions. The report also accused Super Micro of rehiring executives implicated in a scandal from 2018. At that time, Super Micro chose not to comment on what it described as unfounded rumors.
In the wake of these allegations, reports emerged that the Justice Department has begun investigating Super Micro, according to sources familiar with the situation.
Despite the controversies, Super Micro has benefited from the ongoing artificial intelligence boom. For the fourth quarter, the company reported revenue of $5.31 billion, reflecting an impressive growth of over 143% compared to $2.18 billion in the same quarter of 2023.