October 21, 2014 



Port of Seattle 
2014 Engagement Service Plan

AGENDA 
Moss Adams Service Team Leaders 
Summary of Services 
Responsibilities (Auditor / Management) 
Phases of the Audit 
Moss Adams Audit Approach 
Areas of Audit Emphasis 
Audit Timing 
Auditing Standards / Accounting Pronouncement Update

YOUR 2014 AUDIT SERVICE TEAM LEADERS 
Team Member          Responsibilities 
Engagement Reviewer - Laurie will serve as your
lead client service partner, overseeing all projects we
perform for the Port. 
Laurie Tish, 
Partner 
Concurring Reviewer - Jim will serve as the second
partner reviewer of the financial statements and our
reports and, as necessary, will consult on technical
issues or key elements of the audits. 
Jim Lanzarotta, 
Partner 
Additional Reviewer - Kory specializes in audits of
governmental entities and employee benefit plans.
He will oversee the engagement team and will
review testing performed during the audit. 
Kory Hoggan, 
Senior Manager

YOUR 2014 AUDIT SERVICE TEAM LEADERS 
Team Member          Responsibilities 
Manager - Tyler will supervise our staff in the field
and manage each of the audits we perform for the
Tyler Reparuk,  Port. 
Manager 
Senior - Lisa will spend her time assisting with the
supervision of staff in the field and performing
procedures related to the financial statement
accounts and the OMB A-133 audit. 
Lisa Dion, 
Senior 
Moss Adams Advisory Services Partner - Chris
will lead our audit procedures covering the Port's
Information Technology (IT) systems, including
Chris Kradjan,  general computer controls. 
Partner

YOUR 2014 AUDIT SERVICE TEAM LEADERS 
Team Member          Responsibilities 
IT Consulting  Kim will oversee and lead the IT
testing procedures, which is a significant part of our
audits. 
Kimberly Koch, 
Senior Manager 
IT Consulting - Kevin will serve as an additional
reviewer of our IT procedures and will perform
audit procedures related to IT security and related
Kevin Villanueva, 
issues. 
Senior Manager

YOUR 2014 AUDIT SERVICE TEAM 
The following individuals will also serve on the
Port of Seattle Engagement Team: 
o John Witt, Business Assurance Staff 
o Dan Sievers, Business Assurance Staff 
o Abby Barr, Business Assurance Staff 
o Maribelle Clear, IT Senior Consultant 
o Fiona Deng, Branch Richards & Co; Subcontractor, Business
Assurance Staff

SCOPE OF WORK 
SUMMARY OF SERVICES 
Audit and report on financial statements for both the Enterprise Fund and
the Warehousemen's Pension Trust Fund to be included in the Port's
Comprehensive Annual Financial Report 
Audit and report on internal control and compliance over financial
reporting in accordance with Government Auditing Standards 
o Issue a management letter of recommendations and observations, as
necessary 
Audit and report on compliance related to the Airport Improvement
Program (AIP) and other Major Federal Award Program(s), the Schedule
of Expenditures of Federal Awards and related internal controls in
accordance with Federal Circular OMB A-133 
Audit and report on the schedule of Passenger Facility Charge (PFC)
program receipts and expenditures and related internal controls 
Audit and report on the schedule of net revenue available for revenue
bond debt service

OUR RESPONSIBILITIES 
Ensure the Audit Committee is aware        Express an opinion on the Port's
of any significant deficiencies or            financial statements based on our
material weaknesses                  audit 
Communicate those matters that            Issue GAGAS, Circular A-133, PFC, and
have come to our attention as a           Schedule of net revenue available for
result of the performance of the           revenue bond debt service Reports 
audit 
Report any non-compliance with
Immediately inform management            federal and state laws as required by
and the Audit Committee about any        OMB Circular A-133 
information indicating illegal acts
/fraud that may have occurred            Read other information contained in
audited financial statements and
Conduct the audit in accordance with         consider whether the information is
generally accepted auditing              materially consistent with the
standards (GAAS) and generally          information in the financial
accepted government auditing           statements. 
standards (GAGAS)

MANAGEMENT'S RESPONSIBILITIES 
Establish and maintain adequate        Make accurate and complete
records and internal controls         financial statement information
over financial reporting              available to us. 
Prepare financial statements           Make entity personnel available
that are materially correct and        to us. 
in compliance with applicable
accounting standards             Inform us about all known or
suspected fraud affecting the
Provide written representations         entity 
about management's
responsibilities and assertions       Identify and ensure compliance
prior to issuance of our reports.        with laws and regulations
applicable to the entity's
activities

PHASES OF THE AUDIT 
Planning and risk assessment 
Assessment and evaluation of internal controls 
Substantive audit procedures 
Reporting and presentation of audit results

AUDIT TIMELINE 
Planning & Risk      Testing of       Testing of IT     Substantive Audit     Reporting &
Assessment     Internal Controls      Controls        Procedures      Communications 
November 2014/ 
January 2015 

April 2015 
October 2014                   Final review of fieldwork,
report issuance, meet and
present to Audit Committee 
September/October 2014            February - March 2015 
Final procedures for FS and
single audit

PLANNING AND RISK ASSESSMENT 
Audit risk involves the risk of material misstatement in
the financial statements 
Audit is designed to provide reasonable  not absolute  
assurance that the financial statements are free of
material misstatements 
Audit risk model  considers different types of risk 
o Inherent risk 
o Control risk 
o Detection risk 
Audit scope and approach is determined based upon
results of risk assessment

EVALUATION OF INTERNAL CONTROLS 
Components of internal control which we evaluate 
o Control Environment 
o Risk Assessment 
o Control Activities 
o Information and Communication 
o Monitoring 
Top-down approach 
o Assess entity-level controls and information technology related
(general computer) controls 
o Identify significant accounts and processes 
o Obtain documentation of significant accounts and processes 
o Assess design and implementation and perform walkthroughs of
significant controls 
o Identify "key controls" for testing 
o Perform tests of controls and compliance

SIGNIFICANT ACCOUNTS AND PROCESSES 
Administration of federal awards and related administrative
controls 
Billings, cash receipts, and receivables 
Airport, seaport, real estate lease agreements and other operating
leases 
Procurement, cash disbursements, and payables 
Payroll 
Capital assets and projects 
Treasury and investments 
Debt and related accounts 
Environmental remediation liability and contingencies 
Financial close and reporting 
Information technology (general computer controls) 
Budget

INFORMATION TECHNOLOGY (IT)
TESTING APPROACH 
Determine application systems, databases, and operating
systems in scope 
Identify areas of risk and key IT general computing controls
that support automated and application controls integral to
financial accounting and reporting 
Conduct walkthroughs of significant application and general
computing controls to assess design and implementation 
Perform tests of IT controls and compliance

IT CONTROL AREAS 
Application Controls 
o Procurement and cash disbursements 
o Payroll 
o Billing 
o Capital assets and projects 
o Financial close and reporting 
General Computing Controls 
o Security and access 
o System acquisition and implementation 
o System changes/change management 
o Computer operations

ADMINISTRATION OF FEDERAL AWARDS 
Internal controls and tests of compliance will be performed
relative to the following administrative requirements: 
Allowable costs and activities 
Cash management 
Davis-Bacon Act compliance 
Equipment and real property management 
Matching and level of effort 
Period of availability 
Procurement and suspension and debarment 
Program income 
Reporting 
Sub-recipient monitoring 
Special tests and provisions

SUBSTANTIVE AUDIT PROCEDURES 
Tests of Details 
Directed testing and audit sampling 
Random and judgmental sampling methods are used 
Compliance with requirements of the major federal awards and
the PFC program 
Analytical Procedures 
Comparison of current and prior year results, and actual to budgeted
amounts 
Analysis of detailed changes within certain accounts such as capital
assets, long term debt and investments 
Predictive analytics for income statement accounts, based upon
history , data independent of accounting department, and industry
expectations 
Holistic review of overall financial statements

AREAS OF AUDIT EMPHASIS 
Internal control cycles 
o Key controls identified and tested 
o Capital assets, payroll, cash disbursements are tested via attribute sampling 
o All systems tested via inquiry and walkthroughs 
Management estimates 
o Environmental remediation liability, depreciation, allowance for doubtful accounts,
grant receivables, legal claims 
Bond accounts 
o Arbitrage liability, capitalized interest, compliance with covenants, new issuances,
refunding or defeasances 
Accounting for leases 
Revenue recognition 
o Airport lease agreement, seaport and real estate leasing arrangements, other
operating revenues, taxes, PFC and federal awards, investment income 
Capital assets 
Net Position classification 
Pension Plans and Other Postemployment Benefits 
o Disclosures and reliance upon calculations performed by specialists

GASB DOESN'T REST, WHY SHOULD YOU? 
Accounting Pronouncements in the Works: 
OPEB Plans 
o Similar to pensions noted earlier will require more liability to be reflected in the financial statements 
Fair Value Measurement 
o Will consider if appropriate to change reporting for certain investments at fair value instead of cost 
GAAP Hierarchy 
o Review of the hierarchy levels and assessment of the standard-setting process. 
Lease Accounting 
o Reexamine issues related to lease accounting, determination of whether leases meet the definition of assets
or liabilities. 
Financial Account Reporting Model 
o Reexamination of Statements 34, 35, 37, 41, and 46

ACCOUNTING PRONOUNCEMENTS (GASB) 
GASB 67 - Financial Reporting for Pension Plans  
an amendment to GASB Statement No. 25 (effective Fiscal Year 2014) 
GASB 68 - Accounting and Financial Reporting for
Pensions  an amendment of GASB Statement No. 27 (effective
Fiscal Year 2015) 
GASB 69 - Government Combinations and Disposals
of Government Operations (effective Fiscal Year 2014) 
GASB 70 - Accounting and Financial Reporting for
Nonexchange Financial Guarantees (effective Fiscal Year
2014) 
GASB 71 - Pension Transition for Contributions
Made Subsequent to the Measurement Date  an
amendment of GASB Statement No. 68 (effective Fiscal Year 2015)

OMB GRANT REFORM 
Streamlines the Federal guidance on Administrative Requirements,
Cost Principles, & Audit requirements for Federal awards 
o Limits allowable costs, provides consistent and transparent treatment of costs 
o Eliminates duplicative and conflicting guidance, 
o Targets audit requirements on risk of waste, fraud, and abuse 
o Focuses on performance rather than just compliance 
Audit requirements 
o More emphasis on risk and audit threshold increases from $500K to $750K 
Effective for the Port in fiscal year 2015






CONTACT INFORMATION: 
LAURIE TISH, LAURIE.TISH@MOSSADAMS.COM, 206.302-6466 
KORY HOGGAN, KORY.HOGGAN@MOSSADAMS.COM, 206.302-6404 
TYLER REPARUK, TYLER.REPARUK@MOSSADAMS.COM. 206.302-6431 
CHRIS KRADJAN, CHRIS.KRADJAN@MOSSADAMS.COM. 206.302-6511 
KEVIN VILLANUEVA, KEVIN.VILLANUEVA@MOSSADAMS.COM, 206.302-6542 

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