Super Micro Computer (NASDAQ:SMCI) shares dropped over 4% in premarket
trading Wednesday following the company's announcement of a delay in filing
its quarterly 10-Q report for the period ending September 30, 2024.
A Form 10-Q is the company's quarterly financial report.
In its press release, Super Micro Computer attributed the delay to unresolved
issues related to an ongoing internal review of the company's controls and
reporting processes.
The review, initiated by the company's board in response to concerns raised
by the company's former accounting firm, has resulted in delays for both the
2024 annual 10-K filing and the current quarterly 10-Q.
In August, SMCI delayed the filing of its annual report, citing a need to
assess its internal controls over financial reporting.
Then, in late October, Ernst & Young resigned as SMCI's accounting firm,
saying it was no longer able to rely on management's and the Audit
Committee's representations and was unwilling to be associated with the
financial statements prepared by management.
The news sent SMCI shares tumbling more than 30% and deepened investor
worries about accounting practices at the artificial intelligence server
maker.
A special committee established by SMCI's board has concluded an initial
investigation but requires further time to complete additional work,
according to SMCI's latest press release.
Key tasks are said to include appointing a new accounting firm and finalizing
the assessment of the company's internal controls as of June 30, 2024.
The company cited the need to engage a successor accounting firm and for this
new firm to conduct a thorough audit of financial statements and internal
controls before both the 10-K and the latest 10-Q can be filed.