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Audit Preparation for Cannabis Companies

GreenGrowth CPAs provide internal audit readiness. An internal audit is an unbiased, independent review of systems, business organizations, and processes. You can have an internal team perform the audit or hire a third-party which can help reduce conflicts of interest of a company auditing itself. Organized documentation is the most important step a cannabis business owner can take to ensure success and diminish the risk of being externally audited, like the IRS, for example. Keeping your accounts receivable and liabilities in check will make tax season stress free.

Internal Audits for Cannabis Businesses

Be Prepared

What is included in audit preparation, and what do I need to bring for an audit preparation service?

To get the financial statements up to par, hire a third-party CPA group, like GreenGrowth, to come in and analyze the books.

Make sure you have your documentation prepared prior to our start date. We would be able to see where the financial statement gaps are, create month end schedules that the auditor will request, and document any technical accounting transactions and memos. We convert financial statements to US GAAP or IFRS.

From financial statement preparation to SEC filings, we will make sure that your management team is confident and prepared for the road ahead. Our team of Ex-Big 4 CPAs continues their annual tax education and stays vigilant when new regulations are introduced and old regulations are diminished.

Owners, investors, and stakeholders should receive an annual audit of their cannabis business to understand its financial and operational performance metrics. Tracking these data points over time allows for greater transparency.

Be proactive and audit your own company before an external agency comes in for an audit and you’re not ready with documentation or processes to capture the relevant data. These audits can also help support your business valuation if you ever plan to sell your business outright or merge with another firm.

Faq

What are some complications in the cannabis industry?

Running a business, any kind of business, is a lot of work. There are a lot of moving parts, but cannabis contains more regulation than most businesses. Auditors know that you’re going to potentially slip up and miss out on some of those regulations and reporting requirements, that’s why we offer cannabis audit and assurance solutions.

If you look at federal regulations like the Cole memorandum, this makes it difficult for cannabis businesses to get access to banking. The IRS knows that cannabis deals with a lot of cash. This makes cannabis operators prime targets for a business audit for just a simple reason.

Are you filing your Form 8300? If you have not heard Form 8300, and you’re dealing in hundreds of thousands or even millions of dollars in cash, you need to really understand this law. If you personally don’t want to take care of Form 8300, get a CPA that will help you take care of cannabis audit & assurance services so you can focus on building your business.