In the high-stakes world of tech, reliable financial reporting is essential — especially when you’re a key player in the AI hardware boom. That’s why all eyes were on Supermicro, the high-performance server manufacturer and key Nvidia partner, after it filed several overdue financial reports with the U.S. Securities and Exchange Commission (SEC). But the real drama lies in why those filings were late — and the Big Four firm EY is at the center of the storm.

What Went Down?

Supermicro, a rising star in AI server technology, fell behind on submitting its 2024 annual financial statements and the first two quarters of its fiscal 2025 reports. These delays raised eyebrows in both the tech and investment worlds, where timely reporting is crucial for market confidence.

When the filings finally landed, Supermicro pointed the finger at EY (Ernst & Young) — its former auditor. According to Supermicro, EY’s actions and eventual resignation as the company’s auditor in October 2024 caused the cascading delays.

Why Did EY Walk Away?

EY’s concerns reportedly centered around governance, transparency, and the conduct of Supermicro’s senior management. While specific details were not disclosed in the public filings, it’s clear that EY’s internal risk assessments triggered red flags that ultimately led the firm to sever its auditing relationship with Supermicro.

This isn’t an everyday occurrence. For a Big Four firm to resign mid-engagement, especially from a high-profile client like Supermicro, signals serious concerns about corporate controls or management integrity. Such moves typically only happen when auditors believe they cannot rely on management representations — a fundamental pillar of the audit process.

Supermicro Fires Back

In Supermicro’s view, the financial reporting process was sound, and EY’s concerns were overblown. After parting ways with EY, Supermicro brought in BDO — a mid-tier audit firm — to take over.

BDO completed the audits and gave Supermicro’s financial statements a clean bill of health. With the filings now up to date, Supermicro’s stock surged more than 12%, a clear signal that investors were relieved to have the uncertainty resolved — at least for now.

What This Means for the Big Four and Their Clients

This saga highlights several key issues that extend far beyond Supermicro:

  • Audit Firm Scrutiny: The Big Four — including EY — have come under increasing regulatory and reputational pressure globally to spot governance and transparency issues early. This pressure has made them more cautious about sticking with clients they view as high-risk.

  • Tech Companies Under the Microscope: With the rapid rise of AI infrastructure companies, tech firms face heightened scrutiny from auditors and regulators alike. Investors and auditors are both asking harder questions about governance and internal controls.

  • Mid-Tier Firms Gaining Ground: Supermicro’s ability to secure a clean audit opinion from BDO demonstrates that companies do have viable alternatives outside the Big Four, especially when they face auditor resignations or disputes.

Conclusion

While Supermicro may have smoothed things over with investors for now, the EY resignation raises lingering questions about internal governance and financial oversight. In an era where financial transparency is more critical than ever — particularly for companies tied to high-growth sectors like AI — this case serves as a cautionary tale for both corporate leaders and audit firms.

For the Big Four, Supermicro’s audit dispute underscores the delicate balancing act auditors face: protecting their reputations, meeting regulatory expectations, and managing client relationships. As AI and tech giants continue to dominate the economy, this won’t be the last high-profile audit breakup we see.