Accounting & Auditing

By William J. Hayes, managing editor, Pennsylvania CPA Journal

The growing cannabis industry across the country is a sticky situation for CPAs. It may offer a tremendous growth opportunity for CPAs to work with or for the purveyors of hemp and cannabis who may be relative novices to the rules and regulations of business. However, associating with this industry presents a possible quandary to a profession that prides itself on maintaining high ethical standards. Howard Silverstone, CPA, CFF, and Seth A. Goldberg, JD, led the session “Cannabis Challenges for CPAs” at the Nov. 18, 2019, PICPA Valuation & Forensic Accounting Conference in King of Prussia, Pa. I recently spoke with Silverstone, director of Forensic Resolutions Inc. in Westmont, N.J., to discuss some of the tricky areas addressed at the conference.

What are one or two of the challenges CPAs face as they navigate federal and state regulations governing marijuana?

Marijuana is still classified as a Schedule 1 drug by the U.S. government, and it is therefore illegal at the federal level. Potentially, this could drag a CPA into federal racketeering investigations just by billing clients for services rendered and collecting on those bills. Professional insurance is another challenge. Such insurance may not cover criminal investigations, so it is important for CPAs who plan on taking on clients in this sector to check with their carrier and determine what is covered should there ever be an issue.

Are there any guidelines for CPAs to transact business with cannabis industry participants and avoid an ethics issue?

Many state boards of accountancy have issued guidance on working in this industry. CPAs are bound to exercise due professional care and comply with applicable standards, so it is important to know what is expected in each state. Included in the guidance of the various state boards is the statement that “the federal government views such activity (services to the marijuana industry) as a federal criminal offense.” Again, CPAs should consult with their lawyer, professional insurance carrier, and state board before accepting such engagements and during the performance of such work.

What are some of the challenges faced by businesses in the marijuana industry, and how can CPAs assist with those issues?

Fraud is a very real concern in an industry that relies heavily on cash. Because of the dichotomy between federal and state laws regarding illegality, most traditional banks will not get involved with businesses in this industry. This forces these businesses to use nontraditional methods to maintain their cash. CPAs may be able to assist these companies by helping them identify weaknesses in the alternative methods and where they may be susceptible to loss. Safeguarding cash is paramount in this industry. 

Sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing the form here. 

Ethics

By William J. Hayes, managing editor, Pennsylvania CPA Journal

The growing cannabis industry across the country is a sticky situation for CPAs. It may offer a tremendous growth opportunity for CPAs to work with or for the purveyors of hemp and cannabis who may be relative novices to the rules and regulations of business. However, associating with this industry presents a possible quandary to a profession that prides itself on maintaining high ethical standards. Howard Silverstone, CPA, CFF, and Seth A. Goldberg, JD, led the session “Cannabis Challenges for CPAs” at the Nov. 18, 2019, PICPA Valuation & Forensic Accounting Conference in King of Prussia, Pa. I recently spoke with Silverstone, director of Forensic Resolutions Inc. in Westmont, N.J., to discuss some of the tricky areas addressed at the conference.

What are one or two of the challenges CPAs face as they navigate federal and state regulations governing marijuana?

Marijuana is still classified as a Schedule 1 drug by the U.S. government, and it is therefore illegal at the federal level. Potentially, this could drag a CPA into federal racketeering investigations just by billing clients for services rendered and collecting on those bills. Professional insurance is another challenge. Such insurance may not cover criminal investigations, so it is important for CPAs who plan on taking on clients in this sector to check with their carrier and determine what is covered should there ever be an issue.

Are there any guidelines for CPAs to transact business with cannabis industry participants and avoid an ethics issue?

Many state boards of accountancy have issued guidance on working in this industry. CPAs are bound to exercise due professional care and comply with applicable standards, so it is important to know what is expected in each state. Included in the guidance of the various state boards is the statement that “the federal government views such activity (services to the marijuana industry) as a federal criminal offense.” Again, CPAs should consult with their lawyer, professional insurance carrier, and state board before accepting such engagements and during the performance of such work.

What are some of the challenges faced by businesses in the marijuana industry, and how can CPAs assist with those issues?

Fraud is a very real concern in an industry that relies heavily on cash. Because of the dichotomy between federal and state laws regarding illegality, most traditional banks will not get involved with businesses in this industry. This forces these businesses to use nontraditional methods to maintain their cash. CPAs may be able to assist these companies by helping them identify weaknesses in the alternative methods and where they may be susceptible to loss. Safeguarding cash is paramount in this industry. 

Sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing the form here. 

Leadership

By William J. Hayes, managing editor, Pennsylvania CPA Journal

The growing cannabis industry across the country is a sticky situation for CPAs. It may offer a tremendous growth opportunity for CPAs to work with or for the purveyors of hemp and cannabis who may be relative novices to the rules and regulations of business. However, associating with this industry presents a possible quandary to a profession that prides itself on maintaining high ethical standards. Howard Silverstone, CPA, CFF, and Seth A. Goldberg, JD, led the session “Cannabis Challenges for CPAs” at the Nov. 18, 2019, PICPA Valuation & Forensic Accounting Conference in King of Prussia, Pa. I recently spoke with Silverstone, director of Forensic Resolutions Inc. in Westmont, N.J., to discuss some of the tricky areas addressed at the conference.

What are one or two of the challenges CPAs face as they navigate federal and state regulations governing marijuana?

Marijuana is still classified as a Schedule 1 drug by the U.S. government, and it is therefore illegal at the federal level. Potentially, this could drag a CPA into federal racketeering investigations just by billing clients for services rendered and collecting on those bills. Professional insurance is another challenge. Such insurance may not cover criminal investigations, so it is important for CPAs who plan on taking on clients in this sector to check with their carrier and determine what is covered should there ever be an issue.

Are there any guidelines for CPAs to transact business with cannabis industry participants and avoid an ethics issue?

Many state boards of accountancy have issued guidance on working in this industry. CPAs are bound to exercise due professional care and comply with applicable standards, so it is important to know what is expected in each state. Included in the guidance of the various state boards is the statement that “the federal government views such activity (services to the marijuana industry) as a federal criminal offense.” Again, CPAs should consult with their lawyer, professional insurance carrier, and state board before accepting such engagements and during the performance of such work.

What are some of the challenges faced by businesses in the marijuana industry, and how can CPAs assist with those issues?

Fraud is a very real concern in an industry that relies heavily on cash. Because of the dichotomy between federal and state laws regarding illegality, most traditional banks will not get involved with businesses in this industry. This forces these businesses to use nontraditional methods to maintain their cash. CPAs may be able to assist these companies by helping them identify weaknesses in the alternative methods and where they may be susceptible to loss. Safeguarding cash is paramount in this industry. 

Sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing the form here. 

Practice Management

By William J. Hayes, managing editor, Pennsylvania CPA Journal

The growing cannabis industry across the country is a sticky situation for CPAs. It may offer a tremendous growth opportunity for CPAs to work with or for the purveyors of hemp and cannabis who may be relative novices to the rules and regulations of business. However, associating with this industry presents a possible quandary to a profession that prides itself on maintaining high ethical standards. Howard Silverstone, CPA, CFF, and Seth A. Goldberg, JD, led the session “Cannabis Challenges for CPAs” at the Nov. 18, 2019, PICPA Valuation & Forensic Accounting Conference in King of Prussia, Pa. I recently spoke with Silverstone, director of Forensic Resolutions Inc. in Westmont, N.J., to discuss some of the tricky areas addressed at the conference.

What are one or two of the challenges CPAs face as they navigate federal and state regulations governing marijuana?

Marijuana is still classified as a Schedule 1 drug by the U.S. government, and it is therefore illegal at the federal level. Potentially, this could drag a CPA into federal racketeering investigations just by billing clients for services rendered and collecting on those bills. Professional insurance is another challenge. Such insurance may not cover criminal investigations, so it is important for CPAs who plan on taking on clients in this sector to check with their carrier and determine what is covered should there ever be an issue.

Are there any guidelines for CPAs to transact business with cannabis industry participants and avoid an ethics issue?

Many state boards of accountancy have issued guidance on working in this industry. CPAs are bound to exercise due professional care and comply with applicable standards, so it is important to know what is expected in each state. Included in the guidance of the various state boards is the statement that “the federal government views such activity (services to the marijuana industry) as a federal criminal offense.” Again, CPAs should consult with their lawyer, professional insurance carrier, and state board before accepting such engagements and during the performance of such work.

What are some of the challenges faced by businesses in the marijuana industry, and how can CPAs assist with those issues?

Fraud is a very real concern in an industry that relies heavily on cash. Because of the dichotomy between federal and state laws regarding illegality, most traditional banks will not get involved with businesses in this industry. This forces these businesses to use nontraditional methods to maintain their cash. CPAs may be able to assist these companies by helping them identify weaknesses in the alternative methods and where they may be susceptible to loss. Safeguarding cash is paramount in this industry. 

Sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing the form here. 

Technology

By William J. Hayes, managing editor, Pennsylvania CPA Journal

The growing cannabis industry across the country is a sticky situation for CPAs. It may offer a tremendous growth opportunity for CPAs to work with or for the purveyors of hemp and cannabis who may be relative novices to the rules and regulations of business. However, associating with this industry presents a possible quandary to a profession that prides itself on maintaining high ethical standards. Howard Silverstone, CPA, CFF, and Seth A. Goldberg, JD, led the session “Cannabis Challenges for CPAs” at the Nov. 18, 2019, PICPA Valuation & Forensic Accounting Conference in King of Prussia, Pa. I recently spoke with Silverstone, director of Forensic Resolutions Inc. in Westmont, N.J., to discuss some of the tricky areas addressed at the conference.

What are one or two of the challenges CPAs face as they navigate federal and state regulations governing marijuana?

Marijuana is still classified as a Schedule 1 drug by the U.S. government, and it is therefore illegal at the federal level. Potentially, this could drag a CPA into federal racketeering investigations just by billing clients for services rendered and collecting on those bills. Professional insurance is another challenge. Such insurance may not cover criminal investigations, so it is important for CPAs who plan on taking on clients in this sector to check with their carrier and determine what is covered should there ever be an issue.

Are there any guidelines for CPAs to transact business with cannabis industry participants and avoid an ethics issue?

Many state boards of accountancy have issued guidance on working in this industry. CPAs are bound to exercise due professional care and comply with applicable standards, so it is important to know what is expected in each state. Included in the guidance of the various state boards is the statement that “the federal government views such activity (services to the marijuana industry) as a federal criminal offense.” Again, CPAs should consult with their lawyer, professional insurance carrier, and state board before accepting such engagements and during the performance of such work.

What are some of the challenges faced by businesses in the marijuana industry, and how can CPAs assist with those issues?

Fraud is a very real concern in an industry that relies heavily on cash. Because of the dichotomy between federal and state laws regarding illegality, most traditional banks will not get involved with businesses in this industry. This forces these businesses to use nontraditional methods to maintain their cash. CPAs may be able to assist these companies by helping them identify weaknesses in the alternative methods and where they may be susceptible to loss. Safeguarding cash is paramount in this industry. 

Sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing the form here. 

Tax

By William J. Hayes, managing editor, Pennsylvania CPA Journal

The growing cannabis industry across the country is a sticky situation for CPAs. It may offer a tremendous growth opportunity for CPAs to work with or for the purveyors of hemp and cannabis who may be relative novices to the rules and regulations of business. However, associating with this industry presents a possible quandary to a profession that prides itself on maintaining high ethical standards. Howard Silverstone, CPA, CFF, and Seth A. Goldberg, JD, led the session “Cannabis Challenges for CPAs” at the Nov. 18, 2019, PICPA Valuation & Forensic Accounting Conference in King of Prussia, Pa. I recently spoke with Silverstone, director of Forensic Resolutions Inc. in Westmont, N.J., to discuss some of the tricky areas addressed at the conference.

What are one or two of the challenges CPAs face as they navigate federal and state regulations governing marijuana?

Marijuana is still classified as a Schedule 1 drug by the U.S. government, and it is therefore illegal at the federal level. Potentially, this could drag a CPA into federal racketeering investigations just by billing clients for services rendered and collecting on those bills. Professional insurance is another challenge. Such insurance may not cover criminal investigations, so it is important for CPAs who plan on taking on clients in this sector to check with their carrier and determine what is covered should there ever be an issue.

Are there any guidelines for CPAs to transact business with cannabis industry participants and avoid an ethics issue?

Many state boards of accountancy have issued guidance on working in this industry. CPAs are bound to exercise due professional care and comply with applicable standards, so it is important to know what is expected in each state. Included in the guidance of the various state boards is the statement that “the federal government views such activity (services to the marijuana industry) as a federal criminal offense.” Again, CPAs should consult with their lawyer, professional insurance carrier, and state board before accepting such engagements and during the performance of such work.

What are some of the challenges faced by businesses in the marijuana industry, and how can CPAs assist with those issues?

Fraud is a very real concern in an industry that relies heavily on cash. Because of the dichotomy between federal and state laws regarding illegality, most traditional banks will not get involved with businesses in this industry. This forces these businesses to use nontraditional methods to maintain their cash. CPAs may be able to assist these companies by helping them identify weaknesses in the alternative methods and where they may be susceptible to loss. Safeguarding cash is paramount in this industry. 

Sign up for weekly professional and technical updates in PICPA's blogs, podcasts, and discussion board topics by completing the form here.