3. Moss Adams Audit Service Plan
Port of Seattle Discussion with the Audit Committee 2021 AUDIT PLANNING Presented by: Olga A. Darlington, Partner Anna Waldren, Senior Manager Agenda o Moss Adams Service Team o Scope of Services o Responsibilities (Auditor and Management) o Audit Process o Consideration of Fraud o Risk Assessment o Audit Timeline 2 Your Service Team Leadership Olga A. Darlington Tammy Erickson Anna Waldren Lead Client Service Concurring Reviewer Senior Manager and Engagement Tammy.Erickson@ Anna.Waldren@ Partner mossadams.com mossadams.com Olga.Darlington@ mossadams.com Click icon to Max Jasper Click icon to Abe McClenny add headshot IT Senior add headshot IT Manager Manager Abe.mcClenny@ Max.Jasper@ mossadams.com mossadams.com 3 Summary of Our Services and Deliverables Audit and report on financial statements for the Port's Enterprise Fund and Fiduciary Fund, comprised of the Warehousemen's Pension Trust Fund, included in the Port's Comprehensive Annual Financial Report; Report on internal control and compliance over financial reporting in accordance with Government Auditing Standards; Audit and report on compliance related to Major Federal Award Program(s), the Schedule of Expenditures of Federal Awards and related internal controls in accordance with the Uniform Grant Guidance; 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 revenues available for revenue bond debt service; Agreed Upon Procedures and report to State of Washington Department of Ecology relating to Terminal 91 Facility; Agreed Upon Procedures and report to the Environmental Protection Agency relating to East Waterway SRI/FS; 4 Our Responsibility Under U.S. Generally Accepted Auditing Standards and Government Auditing Standards 1 To express our opinion on whether the consolidated 2 To perform an audit in accordance with generally financial statements prepared by management with accepted auditing standards issued by the AICPA and your oversight are fairly presented, in all material Government Auditing Standards issued by the Comptroller General of the United States, and design the respects, and in accordance with U.S. GAAP. audit to obtain reasonable, rather than absolute, However, our audit does not relieve you or assurance about whether the consolidated financial management of your responsibilities. statements are free of material misstatement. 3 To consider internal control over financial reporting To communicate findings that, in our judgment, are and internal control over compliance as a basis for relevant to your responsibilities in overseeing the designing audit procedures but not for the purpose 4 financial reporting process and administering federal of expressing an opinion on its effectiveness or to awards. However, we are not required to design provide assurance concerning such internal control. procedures for the purpose of identifying other matters to communicate to you. 5 Consideration of Fraud in a Financial Statement Audit Auditor's responsibility: Obtain reasonable assurance the financial statements as a whole are free from material misstatement whether caused by fraud or error. Procedures to address the Engagement team discussion risk of fraud Perform procedures to address Identify the risks of material identified risks misstatement due to fraud Inherent limitation of an audit Unavoidable risk exists that some material misstatements may not be detected 6 Significant Risks Identified During the planning of the audit, we have identified the following significant risks: Significant Risks Procedures Revenue We will substantively analytically test airport and real estate revenue based on current Recognition and prior year information of revenue benchmarks such as square footage, number of passengers, number of planes and landings, dock occupancy, and container counts. We will analyze significant leasing transactions and perform tests of internal controls surrounding the lease revenue determination and recognition process. Construction in We will perform tests of capitalized costs to determine that the charges are reasonable Progress and for the work project and meet the criteria for capitalization. We will also evaluate the Capital Assets newly established process by management to evaluate open work orders for timely closing and transfer to proper categories of capital asset for depreciation. 7 Significant Risks Identified During the planning of the audit, we have identified the following significant risks: Significant Risks Procedures Management We will analyze management's assumptions in establishing allowance for uncollectible Estimates accounting, depreciable lives of capital assets, environmental and legal reserves as well as actuarial assumption in establishing pension and OPEB liabilities. Grant Compliance We will perform compliance testing of expenditures of federal reserves following the Audit CARES requirements of Uniform Grant Guidance. Specific test will be designed to ensure funds allowability of expenditures of grant awards under CARES Act and CRSSAA. 8 Audit Timeline 2021 2022 SEPTEMBER SEPTEMBER/ JANUARY MARCH/ By APRIL 30 MAY/JUNE OCTOBER APRIL Planning Assessment of Final QC Presentation of meetings with Performance IT Perform final reviews, and the audit results management of interim environment audit fieldwork finalize to Audit procedures and testing of for the auditors' Committee and testing of system financial reports Perform AUP Audit planning internal internal statements, Presentation of procedures as and risk controls controls Single Audit, audit results to required by the assessment and PFC DECEMEBR management EPA and Department of Entrance Ecology meeting with Audit Committee 9 Documents Containing Audited Financial Statements and Independent Auditor's Report Our responsibility under Request for advance Arrangements to obtain generally accepted notification when Port the other information auditing standards intends to include prior to report issuance audited financial statements and the independent auditor's report in a document 10 11
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