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  "documentTitle": "Super Micro Computer, Inc. (SMCI)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2023-01-10 00:00:00",
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  "notes": "The slide highlights a shift in audit rigor, specifically pointing to the 2022 audit's use of independent data specialists to verify management's inventory reserve assumptions.",
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      "text": "It appears that SMCI's auditors are applying more, not less, scrutiny to SMCI's inventory accounting assumptions. We note that the disclosure around auditor testing of its procedures has increased materially. Of particular concern, we observe that the auditor is now turning to data specialists to \"recalculate historical rates.\"",
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      "text": "Comparison of 2022 vs 2020 audit procedures regarding inventory obsolescence reserves.",
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      "text": "We involved data specialists to assess management's estimate on reserve rates by recalculating historical reserve rates across multiple fiscal periods. We compared our independently developed historical reserve rates with the reserve rates used by management to evaluate management's ability to accurately estimate excess and obsolete inventory. — 2022 10-K",
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