Super Micro finds no fraud after Ernst & Young's resignation
- Super Micro Computer conducted a review after Ernst & Young resigned as its accounting firm due to concerns over financial reporting and management integrity.
- The review committee found no evidence of misconduct, contradicting Ernst & Young's claims, and resulted in Super Micro not restating its financial reports.
- Following the findings, Super Micro's shares increased by over 20%, and the company announced plans for new leadership to enhance its governance.
In New York, Super Micro Computer conducted an internal review following the resignation of Ernst & Young as its public accounting firm. This was after Ernst & Young expressed concerns regarding the company's transparency and internal controls in relation to financial reporting, which prompted a multifaceted review. The review, which was carried out by a committee formed by the board and included external counsel, concluded that there was no evidence supporting the allegations of fraud or misconduct made by Ernst & Young. Super Micro announced that it does not anticipate restating past financial reports and noted that shares of the company rose over 20% following the review's findings. This positive outcome is crucial for Super Micro, especially after facing scrutiny over its accounting practices in the past, particularly allegations from Hindenburg Research regarding accounting manipulation. Moreover, the company plans to implement recommendations made by the review committee, including an accelerated search for a new Chief Financial Officer and a Chief Compliance Officer to enhance governance and oversight. Kenneth Cheung was appointed as the Chief Accounting Officer, marking a significant shift in Super Micro’s leadership dynamics as it strives to restore investor confidence and uphold its reputation in the tech industry.