On 11 April 2013, Law No. 6455 introduced some amendments to the Turkish Commercial Code (No. 6102), including a requirement on all joint stock companies to be subject to an audit.

The Draft of the Turkish Commercial Code (TCC) had required all companies (joint stock and /or limited) to be subject to an independent audit. Under the old law, all joint stock companies were obliged to have statutory auditor/s in their constitution.

The day before the new Draft entered into force on 1 July 2012, the requirement to carry out independent audits was annulled, and the Turkish Council of Ministers was instead authorised to determine the companies which would be made subject to audit. Under the new Turkish Commercial Code, only certain companies were obliged to prepare their individual and consolidated financial statements using independent auditors in line with Turkish Accounting Standards which are compliant with International Auditing Standards.

Companies, joint stock and / or limited which met at least two of the following three criteria on their own or together with their subsidiaries and affiliates were defined by the Council of Ministers as being subject to an independent audit. These criteria were:

(1) Total assets in the amount of TL 150 million or more;

(2) Annual net sales revenue in the amount of TL 200 million or more;

(3) 500 or more employees.

According to these criteria determined by the decree of the Council of Ministers on 23 January 2013, it was expected that approximately 2,500 companies would be subject to an audit. Since 2,500 represented only a small fraction of a total of 100,000 companies, these criteria were widely criticised.

The new Law dated 11 April 2013 has now introduced a new provision whereby all joint stock companies – other than those which meet related criteria and are therefore subject to an independent audit - will be subject to an audit. General principles relating to audits, like the qualification of the auditors, their functions, the rules on their appointments and the content of audit reports, are due to be determined by the Turkish Ministry of Customs and Trade and enacted by the Council of Ministers in the next few days.

Dr Gökçe Uzar Schüller (Avukat)