When Marvell Technology Group Ltd. (NASDAQ: MRVL) reported preliminary second-quarter results Friday morning, the company also revealed that the board’s audit committee “is conducting an independent investigation of certain accounting and internal control matters” that occurred during the quarter. That, and a net loss per share of $0.74, sent the stock down about 22%, compared with Thursday’s closing price, to a new 52-week low.

Here is what the company said about the accounting probe:

The investigation consists of a review of certain revenue recognition issues in the second quarter of fiscal 2016 and any associated issues with whether senior management’s operating style during the period resulted in an open flow of information and communication to set an appropriate tone for an effective control environment. More specifically, the investigation has focused on the approximately 7 to 8 percent of revenue recognized in the second quarter of fiscal 2016 that, based upon the original customer request date, would have been received and earned in the third quarter of fiscal 2016 and is now no longer available for receipt in that quarter. Such percentage represents an increase over the prior four quarters and is indicative of softening demand for certain of the Company’s products. … The Audit Committee’s investigation to date has revealed no material issues regarding the Company’s 2016 second quarter financial results, and the Company believes the investigation will have no material impact on its previously issued financial statements.

But wait, there’s more. The investigation also is reviewing certain aspects of the Marvell’s internal control over financial reporting, including controls for the establishment of reserves for litigation.

As a result of the ongoing investigation, Marvell did not issue third-quarter guidance and the company said it will schedule a conference call to discuss second-quarter results when the investigation is completed.

Perhaps the most damaging bit of Friday’s report, at least for the company’s executives, is an acknowledgement that they may have failed “to set an appropriate tone for an effective control environment.”

Marvell’s chief financial officer retired in May and was replaced on an interim basis by the company’s vice-president of finance and investor relations. The company’s three largest shareholders are co-founders: CEO Sehat Sutardja, his wife and company president Weili Dai, and his brother Pantas Sutardja, who is chief technology officer, chief research and development officer, and vice president.

Shares traded down about 16.4% in the mid-afternoon on Friday, at $8.82 in a new 52-week range of $8.21 to $16.78.

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