I’m not a cultured stone installation expert, my concerns with what I see in this pic is related to support for the stone. If this is 2 stories of stone on a wall, there isn’t any angle bracket nor brick shelf, then I’d be concerned and write it up as such. However, if this is a half wall veneer then IMO all looks fine based on the single pic. Also it appears there is sufficient distance between top of foundation and finished grade. Even though the bottom edge of the sheathing is exposed it’s no different than if clapboard, cedar shingles or vinyl siding were installed.