Question

Obtain the annual report for the year 2019 for the Goldman Sachs Bank. Using mainly the annual report and other sources if needed answer the following questions : 1.Name the External Audit firm auditing the Bank, What is the responsibility of the audit firm? What are the forms of audit opinions? What is the opinion of the auditors auditing your Bank? 2.What is equity capital?Compare equity capital of your BANK with peer group. How do you see the level of your BANK capitalization?

PLEASE ANSWER AS SOON AS POSSIBLE !!! ILL GIVE YOU IMMEDIATE RATING !!!

Answer 1

• Name of the External Audit Firm -> PRICEWATERHOUSECOOPERS LLP
• Responsibility of the Audit Firm -> Responsibility of Audit Firm is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. Its a  public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB), therefore they are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. They are conducted their audits in accordance with the standards of the PCAOB. Those standards require that they plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
• Forms of Audit Opinion :-

Unqualified opinion-clean report.

Qualified opinion-qualified report.

Disclaimer of opinion-disclaimer report.

Adverse opinion-adverse audit report.

• Auditor's Opinion -> Unqualified Opinion read as follows: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 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 December 31, 2019, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.
• Total shareholder's Equity Capital -> $90,265 Millions
• Comparison of Equity capital with peer group:-

  PEER GROUPS	TOTAL SHAREHOLDER'S EQUITY CAPITAL ($ IN MILLION)
  MORGAN STANLEY	82,697
  LPL FINANCIALS HOLDING	1,024
  NOMURA HOLDINGS	25,128
  RAYMOND JAMES FINANCIALS	6,643
  STIFEL FINANCIALS	3,670
  CHARLES SCHWAB	21,745

  We can see as mentioned in above table that Equity capital of Goldman sach bank's is better than its Peer Groups.
• Level of Bank's Capitalisation -> In order for a bank to be considered well capitalized in the United States, it must have a leverage ratio of 5.0 percent; a tier I risk-based capital ratio of 6.0 percent; and a total risk-based capital ratio of at least 10.0 percent.

As of December 2019, Consolidated Regulatory Risk-Based Capital and Leverage Ratios

Risk-based capital ratios

CET1 capital ratio	11.7%
Tier 1 capital ratio	15.7%
Total capital ratio	18.3%

Leverage ratio is 11%

Therefore, we can say that Goldman Sach Bank's capitalisation level is good.