Resource
Audit Preparation
Preparation is a filing exercise completed in advance. Operators who maintain the underlying documentation continuously respond to an examination in days rather than months.
The Standing Audit File
Maintain the inventory costing policy, allocation workpapers, monthly reconciliations, cash procedures, payroll registers by department, and the schedules connecting the return to the ledger.
- Costing policy memo with effective dates
- Monthly reconciliation archive
- Return-to-ledger tie-out schedules
What Examinations Focus On
Inventory costing and cost of goods sold, cash handling and completeness of revenue, and the consistency between filings and underlying records are recurring areas of attention.
Responding to a Notice
Note the deadline, avoid informal partial responses, and assemble records with your representative before replying so the response is complete and consistent.
Regulatory Inspection Readiness
Monitoring-system accuracy, current recordkeeping, and documented adjustment authorization are the practical preparation for a license inspection.
Frequently Asked Questions
- How long should records be retained?
- Follow the applicable federal and state retention periods, and retain license-related records for the period required by the agency. Confirm current requirements rather than relying on general practice.
- Who should communicate with an examiner?
- A single designated representative, so responses are consistent and tracked.
- Can preparation guarantee a clean result?
- No. It ensures positions are documented and can be explained. The outcome is determined by the examining authority.
Related Services
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Read moreRelated Resources
280E Explained
A plain-language explanation of Internal Revenue Code Section 280E, what it disallows, and how inventory costing determines recoverable cost.
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How to reconcile the statewide monitoring system with accounting records, including variance causes, cadence, and documentation practices.
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Year-round tax planning practices for licensed cannabis operators, including inventory timing, estimated payments, and documentation.
Read moreDiscuss Your Operation With a Cannabis Accounting Specialist
Call to talk through your license types, current records, and reporting needs, or schedule a consultation at a time that works for your team.