Goldman Sachs 2004 Annual Report Download - page 71

GOLDMAN฀SAC H S ฀ 2004฀ A N N U A L ฀ R E P ORT ฀ ฀ ฀ 6 9
report฀of฀independent฀registered฀public฀accounting฀firm
GOLDMAN฀SAC H S ฀ 2004฀ A N N U A L ฀ R E P ORT ฀ ฀ ฀ 6 9
BES฀•฀Phone฀(201)฀635-5240฀฀•฀FAX฀(201)฀635-5199
BPX/S10829฀•฀Flow฀16฀•฀Proof฀12฀•฀2/4/05฀•฀RUSH
TO฀THE฀ BOA RD฀O F฀ DIREC TO RS฀A ND฀TH E฀ ฀
SH AR EH OL DER S฀ OF฀T HE฀ GOL DM AN฀ SA CH S฀ GRO UP,฀ INC . :
We have completed an integrated audit of The Goldman
Sachs Group, Inc.’s 2004 consolidated financial statements
and of its internal control over financial reporting as of
November 26, 2004 and audits of its 2003 and 2002 consoli-
dated financial statements in accordance with the standards of
the Public Company Accounting Oversight Board (United
States). Our opinions, based on our audits, are presented below.
CONS OLI DAT ED฀ FIN A NCI A L฀ S TATEMENTS
In our opinion, the accompanying consolidated statements of
financial condition and the related consolidated statements of
earnings, changes in shareholders’ equity, cash flows, and com-
prehensive income present fairly, in all material respects, the
financial position of The Goldman Sachs Group, Inc. and its
subsidiaries (the Company) at November 26, 2004 and
November 28, 2003, and the results of its operations and its
cash flows for each of the three fiscal years in the period ended
November 26, 2004 in conformity with accounting principles
generally accepted in the United States of America. These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these financial statements based on our audits. We conducted
our audits of these statements in accordance with the standards
of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the finan-
cial statements are free of material misstatement. An audit of
financial statements includes examining, on a test basis, evi-
dence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and sig-
nificant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
IN T ERNAL฀ C ONT ROL฀ OV ER฀F IN A NCIA L฀ R EP O RTING
Also, in our opinion, management’s assessment, included in
Management’s Report on Internal Control over Financial
Reporting appearing on page 68, that the Company main-
tained effective internal control over financial reporting as of
November 26, 2004 based on criteria established in Internal
Control–Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission
(COSO), is fairly stated, in all material respects, based on those
criteria. Furthermore, in our opinion, the Company main-
tained, in all material respects, effective internal control over
financial reporting as of November 26, 2004, based on criteria
established in Internal Control–Integrated Framework issued
by the COSO. The Company’s management is responsible for
maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control
over financial reporting. Our responsibility is to express opin-
ions on management’s assessment and on the effectiveness of
the Company’s internal control over financial reporting based
on our audit. We conducted our audit of internal control over
financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material
respects. An audit of internal control over financial reporting
includes obtaining an understanding of internal control over
financial reporting, evaluating management’s assessment, test-
ing and evaluating the design and operating effectiveness of
internal control, and performing such other procedures as we
consider necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinions.
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 disposi-
tions of the assets of the company; (ii) provide reasonable assur-
ance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expendi-
tures 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, projec-
tions 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
February 4, 2005