Super Micro’s shares plunged as much as 35% Wednesday morning after the company disclosed its auditor had resigned following months of disagreement with the firm over its governance and board independence.
Ernst & Young in its resignation letter said it was “unwilling to be associated with the financial statements prepared by management.”
The auditor first flagged issues with Super Micro’s internal financial controls, governance and forthcomingness in late July, prompting the server firm to appoint a special board committee to investigate the company’s internal controls.
“We are resigning 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,” EY said in its resignation letter.
EY’s concerns were raised prior to a short-seller report that took aim at Super Micro’s financial controls and accounting practices.
Representatives for Super Micro and Ernst & Young did not immediately return a request for comment.
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