Graduate School of Business
Doctor of Business Administration (DBA)
Legal Cannabis, Good Moral Character, CPA, Due Diligence, Due Care
Accounting | Business
Azzaro, Alice Guy, "Designing a Framework for Maintaining Good Moral Character when Providing Accounting Services to the Legal Cannabis Industry" (2019). Doctoral Dissertations and Projects. 1968.
Cannabis, once delegated to transactions in the shadows and the constant threat of criminal prosecution, has emerged as a booming industry as states continue to legalize it for medical and recreational use. Federal lawmakers have yet to bless the use of cannabis through legislation, so the threat of criminal penalties looms for both cannabis businesses and the businesses that support them, such as CPA firms. State legalization has brought forth an industry that once operated under the radar into the light of legitimacy. With legitimacy comes the obligation to both report and pay taxes at the federal, state, and local levels. Yet, CPAs, conservative by nature, have reasonable objections to offering these services. Both national and state CPA associations require CPAs have good moral character, but providing services to a federally-illegal business has always stood as a violation of that mandate. This qualitative, multi-case research study using semi-structured interviews of CPAs serving the cannabis industry and CPAs that have elected not to serve the industry provides insights into the concerns regarding engaging legal cannabis clients and a framework to protect good moral character when serving the cannabis industry. The framework consists of two parallel paths, due diligence and due care. Due diligence is the processes undertaken to ensure a thorough understanding of the client. Due care is the processes that support protecting both the client and the firm.