Port of Seattle 
2012 Engagement Service
Plan 
September 11, 2012

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 
Issue a management letter of recommendations and observations 
Audit and report on compliance related to the Airport Improvement
Program (AIP) and other Federal Award Programs, the Schedule of
Expenditures of Federal Awards and related internal control in accordance
with Federal Circular OMB A-133 
Audit and report on the schedule of Passenger Facility Charges (PFC's),
receipts and expenditures and related internal controls 
Audit and report on the schedule of net revenue available for revenue
bond debt service 

2

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


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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 
Inherent risk 
Control risk 
Detection risk 
Audit scope and approach is determined based upon
results of risk assessment 
4

EVALUATION OF INTERNAL CONTROLS 
Components of internal control which we evaluate 
Control Environment 
Risk Assessment 
Control Activities 
Information and Communication 
Monitoring 
Top-down approach 
Assess entity-level controls and information technology related
(general computer) controls 
Identify significant accounts and processes 
Obtain documentation of significant accounts and processes 
Assess design and implementation and perform walkthroughs
of significant controls 
Identify "key controls" for testing 
Perform tests of controls and compliance 
5

SIGNIFICANT ACCOUNTS AND PROCESSES 
Administration of federal awards and related administrative
controls 
Billings, cash receipts, and receivables 
Signatory Lease and Operating Agreement (SLOA) 
Procurement, cash disbursements, and payables 
Payroll 
Capital assets and projects 
Treasury and investments 
Debt and related accounts 
Environmental remediation obligation and contingencies 
Third party management 
Financial close and reporting 
Information technology (general computer controls) 
Budget 
6

INFORMATION TECHNOLOGY (IT)
TESTING APPROACH 
Determine application systems, databases, and operating
systems in scope 
Identify 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 


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IT CONTROL AREAS 
Application Controls 
Procurement 
Billing 
Capital Assets and Projects 
Financial Close and Reporting 
General Computing Controls 
Security and Access 
System Acquisition and Implementation 
System Changes/Change Management 
Computer Operations 

8

ADMINISTRATION OF FEDERAL AWARDS 
Internal controls and tests of compliance will be performed
relative to the following administrative requirements: 
Allowable costs 
Cash management 
Davis-Bacon Act 
Equipment management 
Matching 
Period of availability 
Procurement 
Real property acquisition 
Reporting 
Sub-recipient monitoring 
Special tests and provisions 
9

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 
Holistic review of overall financial statements 
10

AREAS OF AUDIT EFFORT 
Internal control cycles 
Key controls identified and tested 
Capital assets, payroll, cash disbursements tested via attribute sampling 
All systems tested via inquiry and walkthroughs 
Management estimates 
Pollution remediation obligations, depreciation, allowance for doubtful
accounts, grant receivables, legal claims 
Bond accounts 
Arbitrage liability, capitalized interest, compliance with covenants, new
issuances, refunding or defeasances 
Accounting for leases 
Revenue recognition 
SLOA, 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 
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OTHER 
New accounting standards effective for 2012 
oGASB 62 'Codification of Accounting and Financial Reporting Guidance
Contained in Pre 1989 Pronouncements' 
oGASB 63 'Financial Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources and Net Position' 
Timing 
oPlanning & Risk Assessment  September, October 2012 
oTests of Internal Controls  October 2012 
o Tests of General Computer Controls  January 2013 
oSubstantive Audit Procedures  February, March 2013 
oReporting and Communications  April 2013 
Staffing 
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QUESTIONS? 


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