High Standards Interview with Sonia Luna

[glossary_exclude] Sonia Luna is the founder, CEO and President at Aviva Spectrum. Winner of the 2018 California Cannabis Awards as “Best Accountant,” Mrs. Luna has more than 18 years of compliance, internal and external audit experience. In 2014 she was appointed by SEC Chair Mary Jo White to the Advisory Committee on Smaller & Emerging Growth Companies. She is an elected member of the Board of Governors for the Institute of Internal Auditors (IIA) and worked in Big 4 environments such as EY and Arthur Andersen.
Sonia is a known expert in compliance matters for public companies and proven leader in the internal audit community. She has worked instrumentally on several of the audit projects issued by the Office of Inspector General of Build-LACCD. She has handled both compliance-related matters from procurement analysis, fair wage analysis, bidding/proposal processes for Build-LACCD as well as fraud investigations.

We caught up with Sonia at her office in Los Angeles:

IG World: Where did you grow up? Go to school?
SL: I grew up in a small area in the San Fernando Valley. It was called Sepulveda back then but today it’s now known as North Hills. I attended a small Catholic school called Saint Genevieve, located in Panorama City. It was a quaint school which taught me discipline, hard work and ethics. Every day started out with prayer and the pledge of allegiance. I was there throughout my elementary and high school. I later studied accounting at Cal State Northridge.

What activities did you most enjoy as a child?
My favorite activity as a child was writing my bike around the neighborhood. This was back in the day where parents would allow their kids to play freely with other kids without adult supervision. I was outside right after I completed my homework. I rode my bike with other kids until dinner time. In school I played basketball and softball. I was very fortunate enough to have excelled in both sports and became captain of my high school teams. I was lucky enough to have a great coach in high school that taught me a lot about focus and determination. His name was Jack Sunderlick. Our school didn’t have super star athletes. We were small in size and talent. Sunderlick was very instrumental in helping me relieve stress from my home life, school and all those things that come with being a teenager. Sunderlick knew the only way we would win games would be if we were the best endurance players on the field. During our breaks we still trained and went to several tournaments so our legs would stay fresh during the regular season. It was a strategy that paid off in the long run. We won several games and even a few championship games during my time there.

When did you first become interested in becoming an accounting professional, and why?
I was a sophomore when I attended my first general accounting class. It was there that the professor notice that I had a talent and understanding accounting concepts. He encouraged me to study more in accounting and that as a profession the accounting firms were opening up more and more positions to women. I later took other courses in accounting and enjoy them. I was lucky enough to connect with one of my elementary school friends, Ronette. She was studying accounting courses as well. She had encouraged me to get involved with the Accounting Association on campus. When I joined, I connected with other accounting students and was able to work part-time and volunteer with my peers. I was fortunate enough to understand the importance of getting good grades, practicing interview questions with my peers and also planning out how we’d pass the CPA exam.

It had to be an uphill climb to break out as an entrepreneur. What was the driving reason you decided to start your own company? And what have been the biggest challenges?
I was a manager at Ernst & Young and noticed that right after Sarbanes- Oxley was passed several of my large client struggled to understand and implement this new set of regulations. It was then that I wrote down my pros and cons of going out on my own. I thought that even if I failed, I could come back to Ernst & Young. I was even willing to take a demotion if I failed because that was going to be my back-up plan. The biggest challenge I faced was getting new clients and learning the art of selling services. I realized quickly that EY has a great brand and therefore it was very easy to get a new client comfortable that you’re going to do a great job. But without a brand you’re truly just selling yourself. It felt as if I was constantly going on a job interview over and over again. But I learned to be diligent, passionate and authentic every time I met with a new perspective client. That’s what really allowed me to sell my services. Clients have found me to be practical thorough and very technical. My passion for automating accounting and compliance gives my clients the comfort that I will create a sustainable compliance system. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides frameworks and guidance on enterprise risk management, internal control and fraud deterrence.

How do you utilize COSO frameworks in your consulting practice? And how do clients benefit?
Currently our consulting practice has two types of clients. Our first set of clients are publicly traded companies that require an internal control audit, due to Sarbanes-Oxley Act (“SOX”). All of our publicly listed clients are using the COSO framework as their baseline for their internal control audit. However, our second set of clients are privately held companies, some of which are in the cannabis industry. COSO has guidance for smaller companies and we leverage that as a baseline for our private and small emerging companies. The cannabis industry is growing so quickly and changing at a rapid rate. Because of this rapid growth, it’s a true challenge identifying the right internal control structure for our cannabis clients. For example, most cannabis companies do not have a bank account. Therefore, cash controls are one of the most important areas we focus on when providing consulting services.

What changes or updates has COSO made in recent years, and how does this affect the industry’s approach to enterprise risk management (ERM)?
COSO recently updated its ERM framework. Most of the updates pertain to information technology security controls and strategic objective alignment. Because IT changes constantly, the ERM updated framework provides more guidance on how to manage these changes, while ensuring they are secure for both the company and its customers. Regarding the updated pertaining to strategic alignment, ERM updated its guidance to mention the importance of the management team to stay on track when allocating its resources.

You are a leading cannabis compliance advisor. What unique challenges to clients face in cannabis compliance in California?
There are several challenges facing California cannabis companies today. Our firm segments compliance into two main areas. The first is state level compliance. The second are federal compliance matters. Our clients are growing so fast that following-up and monitoring all compliance items is not only complicated but also there’s a lack of having a focused and dedicated person on the team to monitor all the compliance issues they face on a daily basis.

Your business is certified with the National Gay & Lesbian Chamber of Commerce, and you are a vocal supporter of LGBTQ issues. How has this impacted your clients’ view of your firm? Has it been good for business?
My clients rarely ask about my certification status, whether that’s from NGLCC or WBENC. I honestly feel in Los Angeles in particular we have turned a big corner and my client’s hire me because we are great at what we do. Having the certifications from these agencies is more like “icing on the cake.” I have had only one major client that upon hiring us they tracked their spend on our firm because we were certified by NGLCC. Therefore, to only have one client track their spend on us in 15 years speaks volumes. Our clients want to hire us because we’re one of the leading experts in the cannabis field and we talk a great deal about streamlining their compliance costs in accounting and taxes.

Which historical figure so you most identify with, and why?
Emilia Earhart is a woman I identify with lately. She embodies a spirit of creating her own course in life. Having left EY so early in my career and just leaving it up to God to help me along the way was both scary but also liberating. Now I’m on the same path venturing out to cannabis clients that my buddies at EY can’t service. Once it becomes federally legal, which may come sooner than what most people think, then they will say I was a true thought leader because I jumped into the space without hesitation and charting my own course in this industry.

What is your idea of perfect happiness?
My idea of perfect happiness, is walking my kids to school, hiking with my family and helping my clients grow.

What do you like most about living in L.A.? What is your favorite lunch place?
Los Angeles has the best weather and I try to take advantage of it every day by walking places, going to hiking trails and visiting the beach. My favorite business lunch spot is located in Culver City called Café Vida. They have delicious vegan dishes that would take me hours to prepare at home. I have taken several of my clients and referrals to this spot and they all seem to love it. It’s a hidden gem in Culver City.[/glossary_exclude]

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About the Author: Robert Smallwood

Robert F. Smallwood, MBA, CIP, IGP, is a thought leader in Information Governance, having published seven books on IG topics, including the world's first IG textbook which is being used in many graduate university programs as well as to guide corporate IG training programs.