Server maker Super Micro Computer is facing mounting challenges after EY resigned as its auditor on October 24, citing concerns about management’s integrity and ethical values. EY’s departure came just months after replacing Deloitte & Touche, which had audited Super Micro for two decades through June 2023.
The resignation raises questions about potential issues Deloitte may have missed. Super Micro has appointed a special committee and hired legal and forensic accounting firms to investigate, though details remain undisclosed. The company faces a November 16 deadline to submit a compliance plan to Nasdaq regarding delayed financial reports. A former employee’s lawsuit alleges improper revenue recognition between 2020-2022 under Deloitte’s watch, prompting a Justice Department investigation. WSJ adds: Persuading another major audit firm to sign on under the current circumstances would be an impressive feat. EY in its resignation letter said it was “unwilling to be associated with the financial statements prepared by management.”
Why would any other auditor feel differently?
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