PwC appointed to probe Goldman Sachs reporting

03 March 2020 Consultancy.uk

The Prudential Regulation Authority (PRA) is understood to have appointed PwC to undertake a "skilled person's report" on Goldman Sachs International. PwC has audited Goldman Sachs International since 1926, and continues to do so outside of Europe.

The Goldman Sachs Group is an American multinational investment bank and financial services company headquartered in New York City. It offers services in investment management, securities, asset management, prime brokerage, and securities underwriting.

Goldman Sachs has been dogged by negative scrutiny for much of its history, but this notably intensified the aftermath of the financial crisis of 2007–2008, where some alleged that it misled its investors and profited from the collapse of the mortgage market. Now, as regulators continue to step up efforts to avoid a future financial collapse of that kind, Britain's banking watchdog has drafted in accountants to scrutinise the quality of Goldman Sachs' regulatory reporting at its large scale London-based operations.

PwC appointed to probe Goldman Sachs reporting

As reported by Sky News, the Prudential Regulation Authority (PRA) is said to have appointed Big Four professional services giant PwC to undertake a "skilled person's report" on Goldman Sachs International. The move comes in response to concerns around the alleged oversight of some of the City's biggest bank balance sheets, and the quality of information being supplied to the PRA.

Interestingly PwC’s appointment to this role comes less than a year after it was announced the firm would be passing its audit remit at Goldman Sachs’ UK operations to Mazars. The choice of Goldman Sachs to select Mazars was speculated to have resulted from the investor’s need to dodge the negative press currently associated with alleged conflicts of interest in the Big Four’s audit portfolio – but PwC remains in the role for Goldman Sachs International, outside of Europe.

In January, Sky News revealed that Goldman's London-based investment bank is not the only institution to be the subject of a PRA investigation. Morgan Stanley and Bank of America Merrill Lynch are among the other Wall Street lenders being assessed in this manner. Meanwhile, the PRA’s decision to commission so-called S166 reviews emerged weeks after fellow lender Citi was handed a record £44 million fine by the watchdog for inadequate internal controls and governance arrangements relating to regulatory reporting obligations – as Citi had consistently overstated its capital and liquidity coverage ratios over almost five years.


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