Internal Audit Department 

Types of Audits 
All audits engagements begin with an audit objective. The audit objective or the audit question
determines the type of the audit and the audit standards to follow. 
Internal auditing is an important part of overall governance, accountability, and internal control.
Per government auditing standards, a key role of many internal audit organizations is to provide
assurance that internal controls are in place to adequately mitigate risks in order to achieve
organization goals and objectives. 
The Institute of Internal Auditors (IIA's) International Professional Practices Framework (IPPF)
defines Internal Auditing as follows: 
Internal auditing is an independent, objective assurance and consulting activity designed
to add value and improve an organization's operations. 
It helps an organization accomplish its objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectiveness of risk management, control, and
governance processes. 

Port of Seattle Framework for Audit Consideration 
Commission        CEO/Port Management          Port Staff       Overall Desired
Results (Outcomes 
and Outputs) 
Sets the overall     Establish governance structure/           Operate systems as     Outcomes, outputs, 
direction and       functions/departments to carry out the    designed by           Desired Results 
Policy             objectives                              management 
Design and establish strategies and       Carry out processes    Outcomes, outputs 
systems for accomplishing goals and     as designed by        Desired Results 
objectives                                 management 
Establish processes for each             Maintain financial     Outcomes, outputs 
function/department                     records and            Desired Results 
documents actions
taken 
Develop policies and procedures for      Carry out the          Desired Results 
each process                             established
processes and
policies. 
Ensures established processes/           Report results to       Desired Results 
infrastructure meet requirements         management 

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Internal Audit Department 

Port of Seattle Mission Statement: Create Economic Vitality HERE 
Port of Seattle Organization Chart and Framework for Audit Consideration 
King County Voters

Commission

Executive Office

Capital 
Aviation                    Seaport           Real Estate                                     Corporate 
Development

Accounting & 
Business            Airport          Lease & Asset          Development &        Aviation Project 
Financial         External Affairs
Development         Operations        Management             Planning           Management
Reporting
Cruise &                                  Capital 
Facilities 
Airport                              Maritime                                Development      Finance & Budget      Health & Safety
Aeronautical                            Management
Properties                            Operations                              Administration

Business                                                                     Central                           Information & 
Commercial                                             Human Resources 
Development &            Landside                            Harbor Services         Procurement                        Communications 
Strategy                                               & Development
Management                                                                    Office                            Technology

Concessions            Aviation 
Environmental &             Fishing & 
Engineering       Internal Audit       Labor Relations
Executive                               Commercial 
Planning
Vessels
Aviation 
Recreational        Port Construction                       Office of Social 
Facilities            Aviation                                                                   Legal
Finance & Budget             Boating            Services                          Responsibility
Director's Office

Airport Office 
Community                                              Seaport Project          Police 
Building                              Seaport              Maintenance                                           Public Affairs
Development                                              Management         Department
Management                          Administration

Building              Finance &                              Portfolio                             Regional 
Department              Budget                                                                                  Risk Services
Management                          Transportation
Environmental 
Facilities & 
Management and                            Real Estate 
Infrastructure
Planning                            Administration 

Utilities               Security

Fire Department
Maintenance


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Internal Audit Department 


Government Auditing Standards (GAGAS) classifies audits into three broad categories as
follows: 
Financial Audits 
Performance Audits, and 
Attestation 

1.  Financial audits  Financial audits provide an independent assessment of whether an
organization's reported financial information (e.g., financial condition, results, and use of
resources) are presented fairly in accordance with recognized criteria (for example, FASB or 
GASB pronouncements). The auditor issues an independent opinion on the f air presentation
of the financial statements.
As part of the financial audit, the auditor also reviews the following processes only to the
extent that the systems are significant over financial reporting: 
Internal control system and process* 
Compliance with laws and regulations* 
Provisions of contracts and grants* 
Professional firms outside the organization typically conduct these types of audits.
Currently, Moss Adams conducts the Port financial audit. 
2.  Performance audits  Performance audit objectives may vary widely and include
assessments of program effectiveness, economy, and efficiency; internal control; compliance;
and prospective analyses. Performance audits are intended to improve organizations 
performance, operations, reduce costs, facilitate decision-making, and contribute to public
accountability. 
*The audit objectives that focus on program effectiveness and results typically measure the
extent to which an organization is achieving its goals and objectives. Example, how well is
the program/department working? Is it achieving the intended results? Is it meeting the
target? 
The audit objectives that focus on economy and efficiency address the costs and resources
used to achieve organization results. Example, why does it cost this much? Would it cost
less? How can we do the same for less (economy)? How can we produce more with the
same resource (productivity)? 
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Performance audit objectives vary widely and may include review and assessment of the
following: 
Organizations/Programs effectiveness* 
Organizations or Program economy/efficiency --includes development of 
benchmarks criteria against which performance is evaluated against 
Internal controls* 
Compliance* 
Prospective analyses and other information*  analysis and conclusions based on
assumptions about events that may occur in the future 
Typical questions in performance audits 
Is this organization/program accomplishing what it's supposed to? 
(program results/effectiveness)* 
Are the procedures adequate or sufficient to? (process results/effectiveness)* 
Does it have to cost this much? (program/service efficiency) 
Can we produce more with the same resources? (productivity) 
Is this agency doing what's required? (compliance)* 
Is the agency handling resources responsibly? (compliance*/efficiency) 
What really happened? (investigation)* 
How much, how many, what if? (information)* 
Currently, the Washington State Auditor's Office (SAO) conducts Port's performance audits 
at the Port. 
3.  Attestation Audits - An attest engagement is an engagement in which a practitioner is
engaged to issue, or does issue, an examination, a review, or an agreed-upon procedures
report on specified subject matter, or an assertion about the subject matter, that is the
responsibility of another party. The responsible party in attest engagements is the person,
individual or representative of the entity, who is responsible for the subject matter. 
Internal Audit, conducts a combination of many elements of audit attestations as outlined on
the operational audits section. 
Other Types of Audits 
4.  Operational Audits Operational auditing involves an objective review and assessment
of the control (strategies, processes, systems, and other operating activities) that management
has designed and implemented in order to achieve organizational goals and objectives. The
auditor's objective is to provide independent assurance on the effectiveness of management
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Internal Audit Department 

controls. The auditor gives an assurance of the end-results that management is trying to
accomplish. For example, if management objective is to create jobs, the auditor gives an
assurance whether the established (infrastructure) controls are effective to allow the creation
of jobs. An operational auditor can also audit to determine whether such jobs were created.
As part of the audit, an operational auditor evaluates and assesses the following: 
Management efforts such as established internal controls which includes the
overall governance, plan, operational strategies, policies, methods, and procedures
adopted by management to meet its missions, goals, and objectives. * 
The processes implemented by management for planning, organizing, directing,
and controlling business unit/department operations. * 
The systems put in place for measuring, reporting, and verifying the reliability
and relevance of information, including monitoring business units/ or departments
performance. * 
Internal control is critical as it serves as a defense in safeguarding assets and in
preventing and detecting errors; fraud; noncompliance with provisions of laws,
regulations, contracts and grant agreements; and abuse. Part of operational
auditing involves assessing and evaluating the following areas which are an
integral part of internal control: 
Risk assessment/Risk management efforts* 
IT governance/information systems controls 
Controls over compliance with applicable laws, regulations, contracts,
and grant agreements* 
Accountability* 
Fraud* 
Analysis of financial activities and non-financial information* 
5.  Compliance Audits*  reviews for compliance with governance regulations and
policies aimed at increasing fiscal transparency of an organization. At the Port, this
includes compliance audit of over 600+ lease and concession agreements. Currently,
Internal Audit spends a great deal of time auditing Port contracts and concessions. In
addition, other Washington State agencies like Department of Revenue and Department
of Retirement audit various compliance requirements within the Port. Compliance
requirements can be financial or non-financial. 
6.   IT Audits reviews and assesses the design and effectiveness of computer general and
application controls. 

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