Super Micro Computer’s effort to fix weaknesses in its internal financial controls has dragged into a second year, a pace that is drawing scrutiny from some accounting experts. 

Leaving material internal weaknesses unresolved for such a length of time is concerning because it raises the risk of a “material mistake,” Nicole Wright, an associate professor of accounting at James Madison University, told CFO Dive. 

“A material weakness means you can’t depend on what’s coming out of there,” Wright told CFO Dive in an interview. “In my experience as an auditor, if someone had a material weakness like this, they were on it very quickly to fix it. To have it lasting longer than a year is pretty surprising.”

The San Jose, California-based AI server maker detailed progress it has made on its remediation efforts last week in a 10-Q filing, while also revealing "material weaknesses” in its internal controls over financial reporting “remain unremediated” as of March 31. 

BDO, the company’s public auditor, flagged internal control issues in February of 2025, issuing an “adverse opinion” on its controls over financial reporting in Super Micro’s fiscal 2024 10-K for the period ended June 30, 2024.

The auditor issued another opinion on the financial internal controls in its most recent 10-K for the fiscal year ended June 30, 2025. “In our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of June 30, 2025,” BDO stated. 

There are some signs that the slow pace of putting the fixes in place may stem from the scope of the project rather than a lack of effort. 

“The remediation effort is massive,” co-authors Francine McKenna and Olga Usvyatsky, of The Dig and Deep Quarry substack newsletters respectively, wrote in a Monday article.

In addition to the segregation of duties changes, Super Micro disclosed that the remediation entails broad ERP redesign projects, enhanced compliance programs, expanded review procedures, and major personnel changes in finance and compliance functions, “yet even after those efforts, the problems remained unresolved,” McKenna and Usvyatsky wrote. 

Part of the struggle may be the remediation’s ties to the company’s ERP system which is being implemented — in and of itself a big undertaking for any company, McKenna told CFO Dive in an interview. Then too, on top of it all, the remediation is just one of the many headaches facing the high-flying company. 

In March, Super Micro’s co-founder Yih-Shyan “Wally” Liaw and two other individuals were charged in connection with a scheme to “secretly divert billions of dollars worth of servers with cutting edge U.S. artificial intelligence technology to China.” 

Super Micro launched an independent investigation into the indictments of three individuals no longer affiliated with the AI server maker. Separately the company has yet to tap a new CFO, a recommendation that came in late 2024 from an independent special committee tasked with investigating the integrity of Super Micro’s audit committee, company management and other matters. 

“They have a lot of issues and the ones related to technology are always hard but definitely made harder by all the turnover and other leadership issues they have,” McKenna said Friday. “I think [the remediation] is going to linger and languish unless or until they get someone really strong in place to who can bring this work over the finish line.” 

As it looks right now from the filings, Wright, who worked at PwC before becoming a professor, said she doesn’t think they’re going to be finished by June 30, the end of the fiscal year. As such, in their next 10-K the company could end up with some kind of qualified type of audit opinion on the controls, she said. 

Wright acknowledged that companies have to walk a fine line when communicating progress on such issues, as they never want to overstate that everything is resolved if there’s uncertainty. But she said if they were nearly complete, she thought Super Micro would have more clearly signaled that they were close to being compliant.

The company did not immediately respond to questions regarding when it expects the remediation to be complete and if it expects to resolve problems and avoid another auditor opinion that flags the issues in its fiscal 2026 annual report coming up. 

In the latest 10-Q, the company stated that it had made “significant progress” in enhancing its controls and believed its actions would be effective in remediating the material weaknesses.

At the same time, it warned “the material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded after completion of appropriate testing that these controls are operating effectively.”