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ultra micro The company’s shares plunged 35% on Wednesday morning disclosed Its auditor resigned after months of disagreements with the company over governance and board independence issues.
Ernst & Young said in its resignation letter that it “does not want to be associated with the financial statements prepared by management.” The accounting firm also expressed concerns about the board’s independence from chief executive Charles Lane and “other members of management.”
Ernst & Young has been retained for the first time to conduct an audit of Advanced Micro Devices for fiscal 2024, the company said. AMD has not yet released its financial statements for this year and is reportedly under federal investigation.
Super Micro makes computers that companies use as servers for websites, data storage and other applications, including artificial intelligence algorithms. The company’s clients include major players in the field of artificial intelligence, such as NVIDIA, AMD and Intel. AMD joined the S&P 500 in March, and its shares have soared 246% in 2023.
Auditors first flagged Super Micro’s internal financial controls, governance and transparency issues in late July, prompting the server company to appoint a special board committee to investigate the company’s internal controls.
“We are resigning because recent information brought to our attention has resulted in us no longer being able to rely on the representations of management and the audit committee,” Ernst & Young said in its resignation letter. Ernst & Young’s concerns were raised in a report that focused on Super Micro’s financial controls and accounting practices. The report was made before.
AMD has previously run into trouble with regulators over its accounting practices. In 2020, the company paid a $17.5 million fine to the U.S. Securities and Exchange Commission after regulators accused it of prematurely and incorrectly recording revenue.
The company hired Cooley Law Firm and a forensic accounting firm to review Super Micro’s internal controls. The company said in a regulatory filing that the review is ongoing.
Representatives for AMD and EY did not immediately respond to requests for comment.
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