Companies’ Accounting Issues Lead to Missed Filing Deadlines

A few weeks ago, we wrote about the upheaval at Super Micro Computer, a California-based public company that builds computer servers. Amid allegations of accounting irregularities, Super Micro was dumped as a client by auditor Ernst & Young. Without an auditor of record to review its financial statements, the company announced it will miss the deadline to file its latest quarterly report.

Super Micro investors initially headed for the exits when word of the accounting troubles got out, but securing BDO as an auditor and offering a plan to get back in Nasdaq’s good graces apparently calmed some fears about the company. In the meantime, Super Micro is not alone in being forced to scramble due to accounting concerns. Here’s a rundown of other high-profile issuers that recently ran afoul of accounting standards or deadlines.

Discover Financial Services

Discover Financial Services, the sponsor of Discover credit cards, announced earlier this month that it wouldn’t have its financial statements ready in time to meet its quarterly deadline. The company is beefing with the Securities and Exchange Commission over its process of remedying overcharges of merchants dating back to last year. Discover said in July that it had settled a class action lawsuit with retailers affected by the snafu.

According to Discover, the SEC took exception to its approach to accounting for the error, hence the delay.

Spirit Airlines

Florida-based Spirit Airlines on Monday said it is filing for Chapter 11 bankruptcy as the budget carrier continues to grapple with a string of problems that have emerged in 2024. They include a court ruling that put the kibosh on its merger with JetBlue Airways and extended haggling over how to restructure its debt load. Spirit had already announced a week earlier that protracted negotiations with lenders would cause it to miss the filing deadline for its quarterly report.

After agreeing to a $350 million equity investment from bondholders and converting $795 million in debt to equity, Spirit is aiming to emerge from bankruptcy in early 2025.

ADM Co.

Then there’s the ongoing saga at Archer-Daniels-Midland Co., commonly known as ADM. The Chicago-based agribusiness company announced this month that Chief Integrity Officer, Ben Bard, is stepping down in 2025. What prompted the company’s head of compliance to leave the company? ADM didn’t offer much in terms of specifics.

However, it seems notable that the move came about a week after ADM revealed it uncovered accounting concerns and intended to amend prior financial statements. The affected filings include the company’s 2023 annual report and quarterly reports from early 2024. Additionally, ADM said it was cutting its profit forecast for 2024.

Bear in mind that ADM already suspended Vikram Luthar, its chief financial officer, earlier this year after initiating an investigation of “certain accounting practices and procedures.”

To be fair, unlike the other companies mentioned here, ADM has yet to miss a filing deadline. The suspicion looming over ADM and its accounting practices doesn’t make its situation any better, however.

Whatever their cause, filing delays and accounting issues are two sure fire ways to spook investors, as they often arise from bigger underlying issues. And while sometimes easier said than done, companies would be well-served to avoid these at all costs.