Our Expertise

Cannabis Audit & Assurance

An audit is an opportunity to assess the quality and reliability of the information you use to make important decisions. We provide valuable insight to help your cannabis business grow:

  • Audits, reviews and compilations of financial statements
  • Preparation of financial statements
  • Forecast-projections
  • Contract or regulation compliance
  • Internal/operational audits
  • Forensic accounting
  • Transaction assistance

GreenGrowth CPAs is PCAOB Approved!

The differences

Audits, reviews and compilations of financial statements

There are many important differences between an audit, a review, and a compilation of cannabis financial statements. 

First, a compilation requires the auditor to just show the financial statements based on the presentations made by the management team, but with no effort to confirm this insight. 

Next, during a review arrangement, the auditor administers analytical steps and asks questions about whether the truthfulness of the information shown in the financial statements. The outcome is a restricted level of assurance. The cannabis financial statements being presented are not required to have any material changes. 

Finally, during an audit engagement, the auditor must authenticate the final balances in the client’s accounts and admissions. This calls for the analysis of source documentation, third party verifications, physical observations, tests of internal controls, and other procedures as needed by the auditor.

know your story

Preparation of financial statements

Financial statements are how cannabis companies portray their story. Because of GAAP, there are four standard cannabis financial statements every operator must prepare. The four statements show the profitability and financial strength of a cannabis company.

  • The financial statement that reflects a company’s financial success is the income statement.
  • The statement of retained earnings – also known as the statement of owners’ equity represents the differences in retained earnings between the beginning and end of a certain time period, which would be a certain month or year.
  • The balance sheet reflects a company’s liquidity and financial stance.
  • The statement of cash flows shows the inflow and outflow of cash for a cannabis company over a certain time period.
Predict the future

Forecast-projections

These are future cannabis financial statements that present, to the best of the responsible party’s understanding and confidence, given one or more possible assumptions, an operator’s anticipated financial position, results of the operations, and cash flow. A cannabis financial projection is sometimes created to display one or more possible trajectories of action for assessment.
follow the rules

Contract or regulation compliance

Cannabis contract compliance is a contract administration tool that centers on conformance with cannabis rules and performance of requirements within the arrangement. Essentially, contract compliance is a method that guarantees all contract parties are fulfilled in a legal manner.
assess your company

Internal/operational audits

The cannabis industry is still in the beginning stages. This means that there lacks a push for cannabis operators like cannabis farmers, extractors or manufacturers to get a third-party audit. In fact, many grow operations will supply their own product into their own retail shops. The question is, why should a cannabis farmer, extractor or manufacturer get a third-party audit from GreenGrowth CPAs? Third-party audits are vital to continuing product protection and assessment by giving a third pair of eyes to confirm what is working for the cannabis company and what is not. With federal de-scheduling around the corner, your cannabis company will need audited financials to go public.

How to Reduce Your Cannabis Business Taxes

Know what's happening

Forensic accounting

With an emerging industry such as cannabis, you will surely come across some types of fraud, embezzlement, or financial misrepresentation. With detailed financial analysis and tracking the movement of assets, forensic investigations can detect the problems and identify the methods used to deceive cannabis business owners. 

Investors & co-founders alike should be aware that just because you know someone personally or have interacted with a business many times, that doesn’t mean you aren’t or won’t be deceived at some point. Forensic accounting utilizes accounting, auditing, and investigative skills to conduct an examination into the finances of an individual or a business. 

This type of accounting also provides an analysis or a report that’s suitable to be used in legal proceedings. When you get to a point where you actually need to investigate financial crimes or misrepresentation, that’s when forensic accounting comes into play. This forensic report will be used in some kind of legal proceedings in a court case.

Improve your process

Transaction assistance

Local, State, and Federal government rules and regulations make banking and handling payment processing very challenging for businesses in the cannabis industry. Because of this, banking and payment processing solution companies are beginning to help cannabis operators. We can help connect you to a cannabis friendly bank or financial payment solution that will improve your current financial transaction process.