Independent audit is the use of independent audit techniques envisaged by international audit standards, and the companies subject to independent audit are reported by auditing and evaluating over their books, records and documents. The issue of which companies are subject to independent audit is regulated in the Decision No. 2018/11597 on the Determination of the Companies Subject to Independent Audit. The auditor must be selected for each activity period and the auditor of the next year must be determined before the current year ends. The aim is to ensure that companies or groups are made transparent and organized in accordance with the law and accounting standards.


Independent audit firms are capital companies authorized by the Public Oversight, Accounting and Auditing Standards Authority to conduct independent audits. These companies, whose titles should include the words "independent audit", are established by the sworn-in, certified public accountant, independent accountant and financial advisors. According to Turkish Commercial Code ("TCC"), the audit is auditing the financial statements, inventories and accountings of limited companies, joint-stock companies and group companies. The annual report of the board of directors is also within the scope of the audit in terms of whether it is consistent with the financial statements.

The purpose of independent audit is to determine whether the information recorded in the accounting period accurately reflects the economic events that occurred during that period and whether the financial statements are prepared accurately. The independent auditor is obliged not to reveal the secrets of the companies while examining their data and also must act honestly and impartially while revealing the facts including not only positive ones, but also those which can be against the company.

Although the auditor links these findings to a report, he/she sets forth the following:

  • Based on the financial statements, its opinion about both the current financial position of the joint-stock company and its possible (future) financial position
  • Based on its annual report, his/her opinion on whether there is a situation that would require the responsibility of the board of directors.


The relevant requirements for companies that are subject to independent audit are regulated in the Decision No. 2018/11597 on the Determination of the Companies Subject to Independent Audit. Accordingly, all companies that exceed the threshold value of at least two of the following three criteria in two consecutive accounting periods are subject to independent auditing:

  • Company's assets shall be at least TRY 35 million,
  • Company's net annual sales revenue shall be at least TRY 70 million,
  • At least 175 people shall work in the Company

A similar regulation applies to companies whose capital market instruments are not traded in a stock market or other organized markets, but are considered publicly traded under the Capital Market Law ("CMB") and exceed the threshold values of at least two of the following three criteria in two consecutive periods.

  • Company's assets shall be at least TRY 15 million
  • Company's net annual sales revenue shall be at least TRY 20 million
  • At least 50 people shall work in the Company

Besides the companies listed in the list (I) and (II) attached to the Decision are subject to audit.


All stock companies, banks and financial institutions, partnerships, public institutions need an independent audit to reach reliable, transparent and understandable and accurate information. The advantages and social benefits of the independent audit to companies and the government are listed below:

  • Independent audit provides the managers of the company with concrete and objective information about the status of the company; it helps management take better decisions.
  • It discourages employees/managers to take illegal actions in companies subject to independent audit.
  • Independent audit is important in determining the credibility of businesses before banks and financial institutions.
  • If financial statements of companies subject to audit are submitted to tax offices, confidence in declarations will increase. The audited financial statements also create confidence in the judicial authorities.
  • Independent audit encourages people to invest in money and capital market instruments.


As regulated in Article 554 of the TCC, the auditors who audit the year-end and consolidated financial statements, reports, accounts of the company and group companies are responsible for the damage they have caused to the company, its shareholders and creditors. In particular, the auditors who supervise the company operations such as the establishment of the company, capital increase, capital decrease, merger, de-merger (spin-off), and change of type are held liable for compensation for damages to be incurred by third parties based on the aforementioned transactions.

Also according to Article 404 of the TCC, it is forbidden to use the business secret that the auditors have learned during their activities. Those who deliberately or unintentionally neglect their obligations are held accountable to the company.


There are some issues regarding independent auditing that companies should pay attention to.

It is mandatory that the independent auditor is selected by the companies at their general assembly for each activity period and the auditor of the next year must be determined before the end of the current year. The selection (assignment) must be registered in the trade registry by the board of directors and announced in Turkey Trade Registry Gazette together with the website of the company. If the auditor is not selected by the general assembly within the first three months of the activity period, in joint-stock companies, the board of directors, one of the board members or shareholders; In limited companies, the board of directors or partners can apply to the commercial court of the first instance and request the appointment of an auditor.

Another issue to be considered by companies is that the balance sheet which is included in the annex of the Independent Accountant Report or Sworn-in Certified Account Report to be submitted to the Trade Registry for reconstruction operations such as mergers, divisions, and type changes should also be approved by the auditor.

Originally published 30 April, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.