Shares of Super Micro Computer Inc. (SMCI), a leading provider of high-performance server solutions, plummeted around 5% in the last 24 hours as of October 31st, 2024. This sharp decline was triggered by the abrupt resignation of Ernst & Young (EY) as SMCI's auditor, citing concerns that have led them to no longer rely on representations from the company's management and audit committee.
In a letter to SMCI's audit committee dated October 24th, EY stated that its resignation was 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 and to be unwilling to be associated with the financial statements prepared by management."
This development has raised serious questions about the integrity of SMCI's financial reporting and accounting practices, as well as concerns over governance and transparency within the company. EY had previously expressed concerns about these issues as early as July 2024, prompting SMCI to appoint a special committee to review its internal controls and engage external advisors.
