Super Micro Computer's efforts to remediate its financial internal control deficiencies have entered their second year, and this pace is drawing scrutiny from some accounting experts.

Nicole Wright, an accounting associate professor at James Madison University, told CFO Dive that long-unresolved material internal control deficiencies are concerning because they increase the risk of "material misstatements."

"A material weakness means you can't rely on the information produced," Wright said in an interview with CFO Dive. "In my experience as an auditor, if someone has such a material weakness, they move quickly to fix it. It's quite surprising for it to persist beyond a year."

The San Jose, California-based AI server maker detailed progress in its remediation efforts in a 10-Q filing last week, while disclosing that as of March 31, its "material weaknesses" in internal control over financial reporting "have not been remediated."

The company's external auditor, BDO, flagged the internal control issues in February 2025 and issued an "adverse opinion" on Super Micro's internal control over financial reporting in its 10-K for fiscal 2024, which ended June 30, 2024.

In the most recent 10-K for the period ending June 30, 2025, BDO again expressed its opinion on financial internal controls: "In our opinion, the Company has not maintained effective internal control over financial reporting in all material respects as of June 30, 2025."

There are signs that the slow progress in remediation may stem from the sheer scale of the project rather than a lack of effort.

"The remediation effort is massive," Francine McKenna and Olga Usvyatsky, co-authors of The Dig and Deep Quarry newsletters, wrote in an article on Monday.

In addition to segregation-of-duties adjustments, Super Micro disclosed that remediation efforts also involve an extensive ERP system redesign project, enhanced compliance programs, expanded review procedures, and significant personnel changes in finance and compliance, "but even after these efforts, the problem remains unresolved," McKenna and Usvyatsky wrote.

Part of the difficulty may lie in the fact that the remediation is closely tied to the ERP system the company is implementing—a major undertaking in itself for any company, McKenna said in an interview with CFO Dive. Additionally, remediation is just one of many challenges facing this high-flying company.

In March, Super Micro co-founder Yih-Shyan "Wally" Liaw and two others were charged with allegedly "secretly shipping servers loaded with cutting-edge American AI technology worth billions of dollars to China."

Super Micro has launched an independent investigation into the indictment of these three individuals, who are no longer affiliated with the company. Additionally, the company has yet to appoint a new chief financial officer, a recommendation made by an independent special committee in late 2024, which was tasked with investigating Super Micro's audit committee, management integrity, and other matters.

"They face many issues, and technology-related problems are always tricky, but all the personnel turnover and other leadership issues certainly complicate matters," McKenna said last Friday. "I think unless or until they bring in a truly strong leader to drive this to completion, the remediation will continue to drag and stall."

Based on current filings, Wright, a former PwC auditor turned professor, said she believes it is unlikely the company will complete the fix before the fiscal year ends on June 30. Therefore, in the next 10-K, the company may ultimately receive some form of qualified audit opinion, she said.

Wright acknowledged that companies must strike a balance in communicating progress on such issues, as they cannot overstate that everything is resolved if there is uncertainty. But she said that if remediation were close to completion, she believes Super Micro would signal more clearly that it is nearing compliance.

The company did not immediately respond to inquiries about when it expects to complete remediation and whether it expects to resolve the issues and avoid another auditor-flagged problem in its upcoming fiscal 2026 annual report.

In the latest 10-Q, the company said it has made "significant progress" in strengthening internal controls and believes its actions will effectively remediate the material weaknesses.

Meanwhile, the company warned that "a material weakness cannot be considered remediated until the applicable remedial controls have operated for a sufficient period of time and management has concluded, after completing appropriate testing, that these controls are operating effectively."