Super Micro Computer Inc (NASDAQ:SMCI) shares jumped 14% after an investigation supported by external legal counsel and a forensic accounting firm found no evidence of misconduct and that no restatement of reported financials was expected.
The company’s stock slumped 62% after its previous auditor Ernst & Young resigned in October, citing concerns about governance transparency and internal controls over financial reporting.
This resulted in delays in the company filing its annual report for the year ending June 30, 2024, and September quarter report, and in turn, Super Micro received a notice of non-compliance from the Nasdaq.
But a review by a special committee found no evidence of fraud or misconduct from management or directors, and that the audit committee acted independently.
The committee determined that the conclusions of EY stated in its resignation letter were "not supported by the facts examined in the review".
Adopting the committee's recommendations, the board has appointed a new chief accounting officer and approved plans to appoint a new CFO, as well as authorizing additional executive hires and other measures to strengthen the company.
A new chief compliance officer, general counsel and expanded legal department were all recommended, along with evaluation and expanding training and guardrails regarding sales and revenue recognition policies and practices.