JUDGE PHILLIPS: What I want to know now is, do I understand him to mean that during the years 1940 to 1943 he had no connection with the WVHA?
DR. HEIM: Your Honor, you have understood it correctly. The defendant stated that he, from 1940 to 1943, was an independent auditor. During that time, apart from other enterprises, he also did auditing work for the economic enterprises of Pohl. That was his only connection with Pohl.
JUDGE PHILLIPS: And the economic enterprise he did auditing for had no connection with the WVHA?
DR. HEIM: Your Honor, according to the statements made by the Prosecution those economic enterprises were called Amtsgruppe W. In the course of my presentation of evidence and by examining this defendant as a witness in his own behalf I shall prove that opinion which has been prevailing so far is absolutely contrary to commercial law and does not apply or compare with the actual conditions.
JUDGE PHILLIPS: I see.
Q Witness, we stopped just now at the time of 30 June 1943. On that particular day, going back to your own statement, you ceased your activity as a certified public accountant with the DWB. What did you do then?
A I was conscripted into the Luftwaffe, the Air Forces. I was in Germany for a short period of time. Then I received my diploma concerning radar appliances whereupon I was assigned in France and Belgium to a so-called special aircraft-detection unit. Certain machines were used in order to detect tri-dimensional position of airplanes in the sky. Toward the end of August 1944 Doctor May who is listed under Office "-IV on the chart took me to the Reich Ministry of Aviation and I worked there as his deputy, first of all for the special invention of Horten which is quite similar to the one invented by Lippisch who is in America, and later on for the single jet plane, ME 262 known in German as Gewaltaktion.
Q Dr. Hohberg, after the end of the War what did you do?
AAfter the end of the War again I did auditing work as a private auditor.
Q When and where were you arrested?
A On 22 October of last year, two French-speaking officers came to see me, they searched my house and took me along. They stated that they were Frenchmen but they were British. They turned me over to the French authorities, then they turned to my apartment. They said they were being sent by me and as funny as it may seem they stole all sorts of things, clothing, typewriter, underwear, watches and similar things. When I inquired of the French Government about this I never received an answer. That same British Captain, Park was his name, 5 days later brought me to Minden to the War Crimes Holding Center.
Q. Witness, were you immediately interrogated there? Were you given a hearing there?
A. No, I was not; I was there in solitary confinement for a while without knowing why. They were mainly interested in the fact whether I was a member of the movement "Free Europe", and what knowledge I had about that movement.
Q. Weren't you asked to write a report in Minden?
A. After having been in confinement for three weeks, a British Air Force captain by the name of Walker called me, and he asked me if I was ready to write a report on the DWB concern. DWB stands for German Economic Enterprises. However, he said that one of the conditions was that I would have to be subordinated to Dr. Volk in his position as an SS Sturmbannfuehrer. That in itself was an insult for me, but I did it just the same because the conditions of my confinement were more than unpleasant.
Q. Did you have any hearings in your own case in Minden in your own behalf?
A. I asked Captain Walker to be heard in my own behalf; however, he refused to permit me to do so by stating that he had been informed by witnesses that in my Berlin apartment I had kept all these SS and NSDAP insignia and swastikas, and that in any case they wanted to see to it that I didn't come to Nuernberg as a witness.
Q. What was the result of your examination there?
A. The result of the examination was that Dr. Volk, Mummenthey and my own small person--after a month and a half compiled a report consisting of 250 typewritten pages in which I described all the DWB enterprises which I had done auditing work for; Dr. Volk, mainly, described all the other Amtsgruppen of the WVHA. I am quite surprised that the report is not here now.
Q. Were you then transferred to Nuernberg?
A. We were released on Christmas and we were able to go home. Early in January we had to report back.
We could move about freely in Minden. It had been stated that we would probably be released, and we would be able to go home after that. On the 8th of January of this year Major Ellis, from the War Crimes unit in Bad Oeynhausen, appeared there and told us that we had to go to Nuernberg for only a short time. He asked us to join him in his car, and in the evening at nine-thirty we arrived in Nuernberg. He told us that unfortunately he would have to turn us in to the prison for that particular night, and that on the following day we would be picked up again by him--and four days after that I was presented the indictment.
Q. Witness, and in that particular indictment the charges made against you were having been an auditor of the DWB, and particularly during that period from '40 to '43. How was your first contact with the SS brought about?
A. Due to my profession, I was travelling quite a lot in Eastern Prussia and in the Province West Prussia. Early in the spring of 1940 I was bombed out I was asked repeatedly to go to Berlin because there might be a possibility for me to become an independent auditor there. The telephone calls came from an old friend of mine named Weidenbach who, together with an SS Oberfuehrer Moeckl, was the Director of the Heinrich Mattoni AG and also business manager of the Sudetenquell GMBH. I drove to Berlin and I had discussions with both of them, telling them first of all I wanted to go through an auditing test which was more of a spot check to see if I could do it, and that was the so-called Reichsverein fuer Volkspflege and Siedlerhilfe.
Q. When you took over the auditing for this Reichsverein, did you take this test for the Pruefungs AG or did you do it for yourself, independently?
A. I acted independently, during my holidays. The period of time, however, at my disposal was not sufficient for me to complete that auditing work, so that all the money made on that auditing work was taken
Q. Would you describe to us in brief terms how that examination came about, and what the result of that auditing work was?
A. The results are rather long, and it will be difficult to explain it in a few brief terms, but I will try.
The Reichsverein had a purpose which was not explained in the organizational, the so-called secularization. I was, first of all, working in Berlin, doing auditing work there. However, no confiscations had taken place there as yet. The second place, where I did auditing work was Wiesbaden; 17 properties had been requisitioned and confiscated there. That property consisted of church property and hospitals and cloisters. The Reichsverein, however, did not take these properties for itself, but rather transferred them to the other property bearers because the Bishop of Limburg wanted to have a trial in every case. He wanted to sue them. The property bearers were city districts, cities, the Party, and certain communities outside of towns. The next station where I did auditing work was Prague. The Reichsverein had worked for itself with larger success there. The Benedictine convent and monastery of Lambrecht had been confiscated there, and then another cathedral in Bohemia, then in Freudenthal in eastern Sudetengau; then with the help of the Reichsunion another monastery had been taken over. Finally, there was something which was rather peculiar; namely the business manager of that Reichsverein at the same time was the man in charge of the Bodenamt in Prague. He was SS Oberfuehrer von Gottberg. He had received money from the Czech Real Estate Office amounting to approximately one million, and passed it on to a GermanCzech bank for the same amount which was supposed to be used as security. He took up a loan and that money was used by him for purposes of the Reichsverein which at that moment had escaped my auditing. In other words, during the course of my examination the question about the responsibility concerning the removal of those amounts from the real estate company in Prague arose.
Q. When did you meet the co-defendant Pohl?
A. At the end of my examination in Prague there was a final conference, which is always usual when auditing work is done. This final conference was attended by a large number of high-ranking SS leaders. I would like to mention Pohl, Hildebrand, Gottberg, Panke, Moeckl; and some others who were not so important. That is where I met Pohl.
Q. What was your task in that last conference?
A. On that last conference I just informed these people about the last examination results which I did for the Reichsverein for Volkspflege and Siedlerhilfe E.V.
Q. What was the offer made to you after that final conference?
A. After the end of the final conference, SS Oberfuehrer Moeckl stated that he wanted to speak to me in connection with Gruppenfuehrer Pohl who held that rank at the time. We drove around Prague, for about an hour in his car. He told me that Pohl's proposal was that I was to take over the auditing work for all his enterprises.
Q. What was your attitude when you heard this offer?
A. At the beginning I wanted to refuse when Moeckl told me about it because I didn't know the entire field at all.
Q. First of all, you were working for the Wirtschaftsberatung A.G., the Economic Consultation Department A.G., weren't you?
A. Yes; I continued working for that firm for another month and a half, together with ten other people at Koenigsberg.
Q. Did you have any further conferences with Pohl in that connection?
A. I was requested to go to Berlin, and I visited Pohl on two occasions, and it was in the course of the second meeting that we concluded an agreement and I signed a contract.
Q. Why was it that, in spite of your refusal at first -- that brought you to finally sign this contract with Pohl?
A The task as such, as an independent auditor to take over that concern which was in financial difficulties was very interesting for me. Furthermore, I was then able to go back to Berlin again. Pohl agreed with all the terms which I put and he stated that his only condition was that if by chance I should want to join the SS the I would have to promise him not to go to church in uniform anymore. There were no other conditions beyond those contained in the contract.
Q What was the result of these conferences?
A On the 10th of May a contract was signed between Pohl in his capacity as chief of the WVHA and myself as an independent auditor, where it was stated that the so called SS economic enterprise were under his supervision.
Q Would you please tell us about the contents of the agreement which you concluded with Mr. Pohl?
A In that contract it was agreed that I was to carry out, first of all, the legally prescribed auditing work for the SS economic industries; secondly, that I was to take over the economic consultation of the business managers in these particular enterprises. His idea there was to see to it that all the legal questions concerning commerce, taxation matters, prices and foreign exchange were to be complied with. The contract also contained certain clauses concerning my salary, also that a secretary and an additional auditor were to be placed at my disposal and that I was to receive an office. The duration of my contract was one year in each case and, the question concerning liability was also contained in there. The idea of the whole contract to establish a possibility for these economic enterprises to have them provided with the required confirmation by a certified public accountant.
Q If I understood you correctly then, you were an economic auditor and a consultant on tax matters for nine economic enterprises which were under Pohl based on the conferences and discussions you had with Pohl.
Is that correct?
A Yes.
Q Would you explain to us now the legal character of that contract?
A The legal character of that contract is what of a working contract and not that of a service contract. I was an independent auditor and not an employee and, apart from that, I had a few more orders from other firms which had nothing to do with this particular contract.
Q What other contracts can you compare this contract with, with reference to its legal character?
A Well, I could compare it with a contract between a lawyer and his client, or the contract between a tailor and his customer for the manufacture of a suit.
Q I see. Thank you. That's fine. In other words on the basis of particular contract, you did not become an employee of Pohl or the WVHA?
A No, I was an independent auditor.
Q When your contract terminated were you subjected to the disciplinary authority of Pohl and were you considered a member of his staff or the WVHA?
A No. However, I have to point out here that shortly after I started working there certain efforts were made by several people in the WVHA to place me under Pohl's disciplinary authority.
Q At that time did you know the connection between the SS and the economic enterprises which you had to audit?
A Yes, I could see that the SS in these enterprises played a most important part. However, I couldn't see in what way the SS was connected economically with these enterprises.
Q Did you know the purpose of the SS in engaging in economic enterprises?
A Yes, I did. When I signed the contract with Pohl, Pohl told me precisely the purpose which pursued with his enterprises. The most important part was the cultivation of the standard of living and the betterment of the food by using special food.
In other words, basically speaking, they were purely social aims.
Q Would you take a look at the Document Book No. 2 introduced by the Prosecution, page 124 of the German and page 107 of the English text?
DR. HEIM: It is Document NO-1016, Prosecution Exhibit 46, Document Book No. 2, your Honors.
Q Did you at any time have any knowledge of the organization tasks of Amtsgruppe which are described in this document?
DR. HEIM: That is on page 107, your Honor.
A This document originated on the first of July 1944 and I would like to ask the Tribunal to remember that all the things which occurred after the 30th of July 1943 I have no connection with whatsoever because I wasn't there any longer. The document originated later on.
Q After that time you had no knowledge whatsoever about this document?
A No sir, not about this document.
Q When you were active as on economic auditor with the DWB -- I shall correct myself -- at that particular time when you began your activity as a certified public accountant, were there enterprises which were employing concentration camp inmates and if so did you know anything about it?
A Yes, that was known to me. Pohl informed me of that. He informed me that particularly the DEST, the German Earth & Stone Works, were using concentration camp inmates. He didn't tell me anything about other enterprises. However, the size of the enterprises themselves and the extent of the number of the inmates used there were not discussed during that first conference which I had with him when the contract was signed.
Q What were the reasons which made you conclude that contract with Pohl?
A That task as such looked very interesting to me because most of the firms were suffering from financial distress and I also wanted to avail myself of the opportunity to become independent. Then the auditing work which I did for the Reichsverein also interested me because I wanted to know what had been done in the economic field in these circles and, finally, I availed myself of the opportunity to go back to Berlin.
Q At the time did you have any moral or political misgivings of any kind?
A No, I had no reason to have any misgivings because the aims which were explained to me in detail by Pohl -- I still adhere to today because they were nothing but social aims.
Q After you had concluded as an agreement with Pohl as a certified public accountant, would you please explain to the Tribunal the tasks and the meaning of the term "certified public accountant" in Germany?
A The profession of certified public accountants in Germany is a relatively young profession; as far as the number of public certified accountants is concerned, there are rather few in Germany and that is the reason why this profession is almost unknown. That amongst other things is the reason why among the defendants and also the prosecution there have been so many misunderstandings on that subject. The so-called legally perscribed mandatory auditing had only been introduced in 1933 for the Aktiengesellschaften on one hand and for certain enterprises belonging to the state on the other hand.
I may mention, in this connection for instance for the commercial enterprises, with limited liabilities or Gesellschaft Mie Beschraenkter Hastpslicht commonly known as "GMBH" in Germany, auditing was not mandatory unless they fell under the term "public utilities".
Withing the scipe of this new law, it was concluded that the accounts and balances of all these enterprises and public corporations were only official when they had both the signature and the certification by a public certified accountant. The entire idea of this institution is the same as that of a public accountant, because basically the auditor or the public accountant had to see to it that no damage was caused to the economic part of a country and that the interests of the share holders and also those of the State were safeguarded and that an unsound financial development was avoided. That is the reason why that new law was issued in 1931, because a short time prior to that all these various difficulties were occurring in Europe; I am reminding you of the Schroederbank, Amstelbank, Nordwolle, and other enterprises.
DR. HEIM: May it please your Honors, I will introduce these legal regulations in my Document Book Hohberg No. I, as soon as that document book is translated.
Q. Witness, you spoke of public enterprises in Germany.---
JUDGE PHILLIPS: Let me understand this, please. I understand your testimony to mean that you signed & contract with Pohl as an independent contractor for the purpose of doing independent auditing for the DWB and you were not under the supervision of Pohl or any of the Amtsgruppen in the WVHA, but did your work independently as an independent contractor?
THE WITNESS: Yes, that is correct.
Q. Witness, you just spoke of a public enterprise in Germany, didn't you? Would you please explain in a very few brief terms, particularly to the Tribunal, what this term means, as I don't know if that term is also usual in America?
A. Public corporations fall under the regulation that every year auditing work had to be done. In Germany this refers to enter prises, in which the State participates with more than 50% of the entire capital of the enterprises.
By "State" we mean Provinces, cities, or districts, or communities, or any other source of capital.
Q. How many enterprises were there that had to be audited in Germany at that time?
A. There were approximately 8,000 Aktiengesellschaften which had to be audited and approximately 10,000 Public enterprises which had to be audited, and on top of all those public enterprises, there were all the companies of the DWB concerned, which were not Aktiengesellschaften. The Aktiengesellschaft, as such, had to be audited any way, but not as a public institution.
Q. How many auditors did they have to perform all that work?
A. Towards the end of the war there were approximately 1300 of them. Today there are considerably less. I may now give you a figure of 90,000 physicians, as a comparative figure, 19,000 Protestant parsons, I believe, 70,000 lawyers. In other words, it is a restricted field professionally.
Q. Witness, as a certified public accountant, did you have to take an examination and were you sworn in?
A. Yes, we had to pass an examination. Then we were admitted as accountants and then we were sworn in.
Q. The certified public accountant with regard to the person who gives him assignment is he independent, or is he dependent on his client?
A. The certified public accountant, according to law is absolutely independent at all times. He loses his qualifications that particular moment when he becomes dependent.
Q. Under what agency or organization is the public certified accountant?
A. The public certified accountant is first of all subordi nated to the Institution of the Public Certified Accountants in Berlin.
Then, on the other hand he is subordinated to the official ministerial institutions, that is, the so-called Main Office of the Official Certified Public Accountants, which is nothing else but an agency of the Ministry of Economy.
Q. Is the certified public accountant allowed to use additional auditors or additional personnel in order to help him carry out his task, and, if so, how?
A. Yes, the field of task is too large to permit the Certified Public Accountant to carry out his task all by himself. He is permitted to appoint certain employees as auditors. However, they do not have to be employees. They could also be assistants, who have the necessary qualities, that is, who are auditors themselves. For instance, I can give you one of the examples: The German steel concern, Vereinigte Stahlwerke, were audited by two certified public accountants; because the accountants did not have the necessary number of employees, they simply borrowed those employees as auditors, in this particular case here, from the Preiswoderhaus, which is now the Continental Auditing firm. Other agencies did exactly the same thing, particularly when auditing work was done for the I.G. Farben.
Q. Witness, you stated--
JUDGE PHILLIPS: While you were doing this auditing for the DWB from whom did you draw your assistants?
THE WITNESS: May it please Your Honors, in my contract with Pohl I had the following clause according to which Pohl was to see to it that I would receive auxiliary assistant auditors at my disposal and that they would help me in my auditing work. It was done in the following manner. The WVHA on the basis of a private contract used several civilian auditors. That was at the early stage of the WVHA, but as all those auxiliary assistants could not be had, because most of the people who were auditors, were in the Army something else was done, namely soldiers were placed on detached service for that work.
That was the reason why later on I worked with members of the Waffen SS who were on a TDY status, who all had an experience of several years as auditors.
JUDGE PHILLIPS: They were under your supervision for that work?
THE WITNESS: Yes, they were.
JUDGE PHILLIPS: And were paid by whatever organization they belonged to?
THE WITNESS: Yes, quite so, If they were soldiers, they received their soldiers pay by-
JUDGE PHILLIPS: But they were under your supervision as far as that work was concerned and you directed their activities?
THE WITNESS: Yes, quite so, Your Honor.
Q. Witness, in this connection, I would like to ask you: Were you in charge of these auxiliary assistant auditors placed at your disposal by Pohl disciplinarily or professionally?
A. Those auditors were under my supervision only professionally. I had no influence whatsoever whether they remained with us or left us. All I could do was ask that somebody else be placed at my disposal. Later on it happened that on one occasion when I was absent all auditors were transferred suddenly. I had no influence whatsoever on that.
Q. Witness, you stated that you had made a clause in the contract with Pohl that a certain office be placed at your disposal. I ask you now is it usual that the certified public accountant without being paid on a special basis was to have an office in that enterprise where he was to do some auditing work?
A. Practically speaking, there was hardly any other agreement or arrangement. Since 1932 I have been in this profession and I have done a lot of auditing work in Germany. I also learned the method used by other auditing companies, for instance, of the Preiswoderhaus Company with which I did auditing work on several occasions. It is one of the prerequisite when doing auditing work that auxiliary assistants be placed at one's disposal and also typewriters and an office. In my case it worked out that the contract had a special clause according to which the office where I did the auditing work was put at my disposal for an indefinite period.
Q. Doctor Hohberg, in this professional organization of which you were a member as a certified public accountant, were any restrictions imposed on you with reference to your profession and the auditing work you did in that connection?
A. These restrictions were laid down officially by the Ministry of Economy. I was not permitted to act as a certified public accountant if at the same time I was employed by any other enterprise. Secondly, I was not permitted to act as a certified public accountant if I was employed by any concern--for instance, if I was an employee of the Mattoni, A.G. Let us assume that I was an employee of the Mattoni, A. G. I would never had the legal foundation nor the legal right to audit for another affiliated company: the Sudetenquell, for instance, which was another company.
Q. Are you not allowed to carry out certain prescribed professions?
A. The legal regulations in our profession are rather strict. I could not hold any position where I was a merchant and personally liable. I was not permitted to work in a commercial enterprise, nor could I be a member of a Kommanditgesellschaft. Furthermore, generally speaking, I was not permitted to be an employee at all.
I could not be a presiding member or a business manager of any enterprise with the exception of the so-called auditing companies; and I could not be an official of any kind in a business which was particularly profitable for me. That is to say that over there, on the operational char, it is stated that I am Chief of Staff W. A chief of a staff in Germany had an official position at all times, which for me was not applicable. At that particular moment, if I had become a chief of an office I would have lost my qualifications as a certified public accountant.
THE PRESIDENT: We will take a recess.
THE MARSHAL: The Tribunal will recess for fifteen minutes.
(A recess was taken).
THE MARSHAL: The Tribunal is again in session.
BY DR. HEIM:
Q. Before the recess we stopped when you were explaining the fact that, on the basis of legal regulations, it was forbidden for you to take any employment while you were an auditor. Therefore, you would not have been able to be an office chief. For an auditor are there many sidelines you could take which were authorized?
A. There are several consultant professions which are legal for an auditor to take up, such as the profession of consulting expert, taxation expert, consultant for foreign advisor or commercial organizer or technical organizer. The combination of consulting profession with the auditing profession is a matter of course in many cases. It is explained by the fact that all the regulations concerning balance sheets in Germany are highly complicated and vary from one another. But I do not wish to talk about this to any detail here.
Q. As an auditor did you have the duty to keep secrets?
A. I was under that obligation concerning all matters which I heard about within the scope of my auditing work or which came to my knowledge. Any offense against that would be punished by a prison term.
Q. That's enough. Thank you.
Is the salary of an auditor decided upon by legal arrangements?
A. Yes. There is as a matter of principle a salary according to the time served.
Q. How much would, therefore, have been your actual salary with the DWB?
A. Supposing that I worked with ten auditors as an average, and supposing that sick leave and holidays will be deducted, in that case I will have worked for about 250 days per year. And I would like to emphasize that days spent on trips will be paid. Then, if you get 60 or 80 marks a day you get at least 15,000 marks per auditor and that will amount to 150,000 marks. In that case I as Senior would receive 165,000 marks from which all salaries would have to be deducted. It has to be taken into consideration that all the salaries will be deducted according to normal usage and 60 to 70 thousand marks per year would have been held over.
When the same audits came in repeatedly, then the auditor is allowed to reduce his fees which applied in my case. If I had carried out the auditing of the DWB only once a year, I would have not been allowed to reduce the salary.
Q. Your actual salary was below 70,000 marks, wasn't it?
A. Yes, it was considerably less than that.
Q. For an auditor is there any liability on the basis of his activity and is that liability also concerned with the auditing of the economic enterprises of Pohl?
A. The liability of an auditor is prescribed by law. It cannot be excluded by a contract but it is limited to about 100,000 Reichsmarks for each company. In the case of 40 companies of the DWB concern the total sum on which I could have had a liability on the basis of deficiency would roughly be four million Reichsmarks. I had taken out insurance against this by some special insurance policy.
Q. Since the question of the certificate is important in this examination, I would like you to tell us briefly what the certificate issued by authorities amounts to?
A. The balance sheet of a limited company or of an enterprise which is subject to orders, such as the DWB, is only regarded as complete when it has the so-called confirmation certificate of the auditor who is a public official. Before that no decision must be made, for instance, about the dismissal of the managers or about the amount of the shares and dividends and things like that.
Q. Is there a difference between the certificate of an auditor concerning a limited company and concerning an economic enterprise of the public nature inasmuch as the latter are not limited companies?
A. As this matter is somewhat dull, I shall be brief. The two certificates for the limited company and for the public enterprises had to have a certain form, including the remark that the bookkeeping, the annual balance sheets, were in accordance with the legal requirements.
In the case of limited companies it says also that what is known as the annual report is also in accordance with the requirements of law whereas in the cases of public enterprises the annual report is not audited. No legal requirements exist in this respect but the certificate contains this important sentence: "For the rest the economic conditions of the enterprise have not show cause for anxiety or otherwise they have given cause for anxiety."
Q. What is the result from that for the handling of the auditing by you?
A. The result of these various definitions of the certificate is that the conditions inside the enterprise of the public enterprises must be audited which is the reason why when public enterprises are being audited in Germany in many cases technical experts are called in and it is also the reason why I as an auditor had to visit certain enterprises such as in my case the German Engine Works in Lublin, Auschwitz, and Lemberg, which are part of the indictment. These inspections I carried out as part of my regular obligation to audit these enterprises.
Q. To whom did you auditors have to submit this report?
A. Always to the one who ordered him to do it. For instance, in the case of a limited company to the Board of Directors or in case of public enterprises to the man who had given the order. In my case of the DWB it was Pohl, under whose supervision the enterprises were.
Q. The auditor therefore did not submit the reports to the Reich Ministry of Economics, did he?
A. No, indeed, he did not. He was not allowed to do that. The Reich Minister of Economic Affairs - there was a department which was then directed by Winkelmann, and he carried out the supervision of the auditing of all public enterprises in Germany.
Q. As an auditor were you obliged or entitled to report the bankruptcy of an enterprise?
A. In the regulations for auditors it is layed down expressly that it is not the task of an auditor either to apply for a report of bankruptcy or use his influence to that effect.
That would have meant interfering with independent management of the Board of Directors but that does not prevent an auditor from drawing the attention of the Board of Directors to the fact that bankruptcy looks ahead. For instance, when I began my work one of the subsidiary companies was deep in debt without any auditing being carried out and I had as a matter of course to tell the management that the time was ripe to report the eminent bankruptcy.
Q. What was the influence an auditor had on the enterprise which he audited as regards production?
A. None whatsoever. The auditor can within the frame of his auditing report make retrospective critical remarks but to exercise any influence on the actual management is quite impossible.
Q. Has he any responsibilities in that effect at all?
A. Yes, he is responsible if and when he makes what is known as an unconditional certificate where actual economic conditions in that enterprise are doubtful.