01—Abstract
Summary
Summary of the 8-K filed October 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Super Micro Computer, Inc. filed this Current Report on Form 8-K to disclose that Ernst & Young LLP ("EY") resigned as its registered public accounting firm by letter dated October 24, 2024, while conducting the audit for the fiscal year ended June 30, 2024, which was EY's first audit of the Company.
EY was engaged on March 15, 2023 and has not issued any report on the Company's financial statements or internal control over financial reporting. According to the filing, in late July 2024 EY raised concerns about governance, transparency and completeness of communications to EY, internal control over financial reporting, and the risk to timely filing of the annual report. The Board responded by forming an independent Special Committee, which engaged Cooley LLP and Secretariat Advisors, LLC.
The Review remains ongoing, and final findings have not yet been communicated to EY or the Board. In its resignation letter, EY stated it was resigning due to information that led it to no longer be able to rely on representations from management and the Audit Committee, and that it was unwilling to be associated with the financial statements prepared by management. The Company disagrees with EY's decision, stating the Special Committee has not yet obtained all relevant information or concluded the Review, but says it will carefully consider the Special Committee's findings and any recommended remedial actions.
The Company has begun identifying a successor auditor and does not currently expect the matters raised to result in restatements of its quarterly reports for fiscal 2024 or prior fiscal years. The filing also states there were no disagreements or reportable events with EY during the relevant periods, and attaches EY's letter dated October 29, 2024 as Exhibit 16.1.
02—Key points
Key Highlights
- Ernst & Young LLP resigned as the Company's independent registered public accounting firm by letter dated October 24, 2024, while still conducting the audit for the fiscal year ended June 30, 2024.
- EY had been engaged on March 15, 2023 and has not issued any audit report on the Company's financial statements or internal control over financial reporting.
- EY raised concerns in late July 2024 about governance, transparency, completeness of communications to EY, internal control over financial reporting, and the timely filing of the annual report.
- The Board formed an independent Special Committee, which engaged Cooley LLP and Secretariat Advisors, LLC; the Review is ongoing with no final findings yet communicated to EY or the Board.
- EY's resignation letter cited no longer being able to rely on representations from management and the Audit Committee and being unwilling to be associated with management-prepared financial statements.
- The Company disagrees with EY's decision to resign, stating the Special Committee has not yet obtained all relevant information or concluded the Review.
- The Company does not currently expect the matters raised to result in restatements of quarterly reports for fiscal 2024 or prior fiscal years, and has begun identifying a successor auditor.
03—Questions
Frequently Asked Questions
Why did Ernst & Young resign as Super Micro's auditor?
According to the filing, EY stated in its resignation letter that information recently brought to its attention led it to no longer be able to rely on management's and the Audit Committee's representations, and that it was unwilling to be associated with the financial statements prepared by management. EY also raised questions about the Company's commitment to integrity and ethical values under COSO Principle 1, and about whether the Audit Committee and Board act as an oversight body independent of the CEO and management under COSO Principle 2.
Has Super Micro's auditor issued an opinion on its financial statements?
No. The filing states that EY was engaged on March 15, 2023 to audit the fiscal year ending June 30, 2024, and has not issued any report on the Company's financial statements or its internal control over financial reporting. EY resigned while conducting that audit, which was its first audit on the Company's behalf.
Will the auditor resignation lead to restatements of prior financial results?
The Company states it does not currently expect that resolution of the matters raised by EY, or under consideration by the Special Committee, will result in any restatements of its quarterly reports for the fiscal year ending June 30, 2024, or for prior fiscal years. The Special Committee's Review remains ongoing, and final findings have not yet been communicated.
What is the Company doing in response to the concerns raised?
The Board appointed an independent Special Committee in late July 2024 to review the matters, certain internal controls, and governance procedures. The Special Committee engaged Cooley LLP and Secretariat Advisors, LLC to conduct an investigation. The Company says it has taken EY's concerns seriously and will carefully consider the Special Committee's findings and any recommended remedial actions, and it has begun the process of identifying a successor independent registered public accounting firm.
Does the Company agree with EY's decision to resign?
No. Although the Company acknowledges EY's decision is final, it disagrees with the resignation, stating that the Special Committee has not yet obtained all information relevant for the Review and has not concluded the Review.
04—Continue