From a stockholder viewpoint it appears that Goldman Sachs does not have an ideal audit committee if you believe that this committee should have the independence and integrity needed to verify that the financial statements pass the 'smell' test. It looks as though half of the members of its audit committee should resign, as did Mr. Gupta, the friend of Mr. Rajaratnam, who has been convicted on insider-trading charges.
The chairman of the committee led Price Waterhouse Coopers. During his tenure the SEC found that the firm had violated auditor-independence rules 8,000 times. The chairman also held stock in one of Price's clients. Another director was head of Fannie Mae which failed the smell test on his watch. A third director was on GM's audit committee at a time when it was accused by the SEC of misstating its results for several years. And then there is the former chairman of Goldman who is on the audit committee for Goldman.
Perhaps, there are other reasons beyond luck and talent that account for Goldman's financial successes.
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