Goldman Sachs 2007 Annual Report Download - page 87

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Report of Independent Registered Public Accounting Firm
As discussed in Note 2 to the consolidated financial statements,
the Company has adopted SFAS No. 157, “Fair Value
Measurements” and SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities.”
A company’s internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions
of the assets of the company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations
of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
PricewaterhouseCoopers LLP
New York, New York
January 24, 2008
To the Board of Directors and the Shareholders
of The Goldman Sachs Group, Inc.:
In our opinion, the accompanying consolidated statements of
financial condition and the related consolidated statements
of earnings, changes in shareholders’ equity, cash flows and
comprehensive income present fairly, in all material respects,
the financial position of The Goldman Sachs Group, Inc. and
its subsidiaries (the Company) at November 30, 2007 and
November 24, 2006, and the results of its operations and its
cash flows for each of the three fiscal years in the period ended
November 30, 2007 in conformity with accounting principles
generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of
November 30, 2007, based on criteria established in Internal
Control
—
Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
The Company’s management is responsible for these financial
statements, for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting, included in
Management’s Report on Internal Control over Financial
Reporting appearing on page 84. Our responsibility is to express
opinions on these financial statements and on the Company’s
internal control over financial reporting based on our integrated
audits. We conducted our audits in accordance with the standards
of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether
effective internal control over financial reporting was maintained
in all material respects. Our audits of the financial statements
included examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement
presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
risk. Our audits also included performing such other procedures
as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinion.
85Goldman Sachs 2007 Annual Report