SuperMicro - Alleged Accounting Fraud

This is a great point

EY is a global “network” of companies, though EY US is separate and distinct from the other EY firms. This is primarily due to regulations in most countries requiring domestic audit firms for issuers listed on domestic exchanges.

In practice, SuperMicro’s foreign subsidiaries are likely audited by auditors local to those subsidiaries. Those auditors will report on the subsidiary. EY US will audit the parent company and rely on the subsidiary auditor’s audit report for the subsidiary.

Point being - the accounting issues perhaps lie within the subsidiaries.

I’ll add context that I do work as an auditor, not for EY but for another US Big4 firm. We fire clients often that are not highly profitable ones, though we always work to ensure a smooth transition over a multi year period. An abrupt withdrawal like this is very strong indication that the relationship brought a lot of risk to EY’s reputation.

Interesting to know if there were any whistleblowers. Read here that they get rewards. So that’s a big plus.