Shares of Super Micro Computer Inc., better known as Supermicro, plunged 33% today after the server maker disclosed that its auditor had resigned.

The company hired Ernst & Young LLP to review its finances this past March. The accounting firm informed Supermicro last Thursday that it’s exiting the audit. EY’s resignation marks the latest in a series of recent developments that have brought the server maker’s accounting practices under scrutiny.

Founded in 1993 as a motherboard manufacturer, Supermicro is now one of the world’s top data center equipment suppliers. Its products range from blade servers, compact machines optimized for power efficiency, to large artificial intelligence appliances with multiple graphics cards. Supermicro also sells certain related products such as cooling equipment.

The company brought EY aboard to audit its earnings disclosures for the fiscal year ended June 30. About four months after it began the review, the accounting firm raised concerns about Supermicro’s financial reporting practices. This disclosure kicked off the sequence of events that ultimately led to EY’s resignation.

In response to the accounting firm’s concerns, the Supermicro board formed a committee to review the server maker’s finances. That committee, in turn, hired a law firm and a forensic accounting firm to support its work. The recently shared preliminary findings of the review are what led EY to end its work with Supermicro.

“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 and to be unwilling to be associated with the financial statements prepared by management,” EY wrote in a letter to the board committee examining Supermicro’s finances.

In August, Supermicro delayed the filing of its annual financial performance report after a short seller raised concerns about its accounting practices. Hindenburg Research stated that the server maker’s earnings disclosures contain “glaring accounting red flags.” The short seller claims to have identified, among other issues, failures to comply with export controls and undisclosed related party transactions, which are deals involving parties such as subsidiaries of the same company.

A few weeks after Hindenburg’s report, sources told the Wall Street Journal that the U.S. Justice Department is investigating Supermicro. The paper didn’t specify the focus of the probe. However, it detailed that a prosecutor had requested information related to a former Supermicro staffer “who accused the company of accounting violations.”

Supermicro’s finances previously came under scrutiny in 2020. That year, the company paid $17.5 million to end a U.S. Securities and Exchange Commission into its accounting practices.

The company detailed in a filing that it’s currently searching for a new auditor to replace EY. It stated that it “does not currently expect that resolution of any of the matters raised by EY, or under consideration by the Special Committee, as noted below, will result in any restatements of its quarterly reports for the fiscal year 2024 ending June 30, 2024, or for prior fiscal years.”

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