Turkish Commercial Code ("TCC") dated 13.01.2011 and
numbered 6102 introduces significant provisions regarding good
management and internal and independent audit that are to be
applied to capital stock companies. The council of ministers
decision ("decision"), concerning the determination of
the companies which are subject to independent audit, is published
on the Official Gazette dated 23.01.2013 and numbered 28537. This
decision specifies the procedures and principles for companies
which are subject to auditing in the scope of the TCC article
The decision enters into force on the date it is published on
the Official Gazette, namely on January 23rd, 2013. However, it
shall be effective from January 1st, 2013 for the related
B. Companies Subject To Independent Audit
In the event a company is subject to independent audit; the
auditor of the company must be an independent auditing firm whose
shareholders hold the title of sworn financial advisor or a
certified public accountant. Small and medium-sized joint stock
companies can elect one or more sworn financial advisors or
certified public accountants as auditor.
The decision classifies the companies, subject to independent
audit, under three different categories:
I. List Number (I) annexed to the decision is the first category
which determines the companies required to have independent
The companies mentioned in the list number (I) are;
Certain companies subject to the Capital Market Board's
supervision (i.e. Investment institutions, portfolio management
companies, asset leasing companies, credit rating agencies
Certain companies subject to Banking Regulation and Supervision
Agency's supervision (i.e. Banks, factoring and financial
leasing companies, credit rating agencies, financing companies,
asset management companies etc.),
Insurance, reinsurance and pension companies,
Authorized institutions active in the Istanbul Gold Exchange,
brokerage companies dealing with precious metals,
Joint-stock companies licensed for agriculture products
storage, joint-stock companies incorporated pursuant to public
Media service providers who own national terrestrial,
satellite, cable televisions.
II. Companies, including their subsidiaries and affiliates,
which meet at least two criteria mentioned below are subject to
150 million TL and higher total assets
200 million TL and higher total net annual sales
500 or more employees
In the event a company meets at least two of the above mentioned
requirements both in 2011 and 2012; this company should be subject
to independent audit in 2013. This company should appoint its
auditors in its General Assembly which should take place until the
end of March.
III. Companies, including their subsidiaries and affiliates,
stated in the List Number (II) annexed to the decision, should be
subject to independent audit provided that limitations in the List
Number (II) are taken into account.
In the event a company meets at least two of the criteria stated
in the List Number (II) both in 2011 and 2012; this company should
be subject to independent audit in 2013. This company should
appoint its auditors in its General Assembly which should take
place until the end of March.
C. Implementation Principles
A company is subject to independent audit beginning from the
following accounting period, provided that it meets at least two
criteria in two consecutive accounting periods. In the event the
company is unable to meet at least two criteria in two consecutive
accounting periods or the company is under the mentioned limits for
twenty per cent (20 %) or more; then the company is exempted from
independent audit as of the following accounting period.
Financial statements, to be taken account for calculating total
assets and total sales figures, are the 2011 and 2012 financial
statements which are prepared in accordance with the current
regulations (Tax Procedure Law). Average of the 2011 and 2012's
employee numbers should be taken account for calculating the
employee number criteria mentioned in the decision.
Figures stated in the parent company and subsidiary/affiliate
company's financial statements should be summed up and this
total number (excluding internal group transactions) should be
taken account to determine whether a company having
subsidiaries/affiliates is required to have independent auditor or
not. Average number of employees working in the company and its
subsidiary/affiliate in 2011 and 2012 should be taken account for
calculating the employee number criteria mentioned in the
Turkish Accounting Standards provisions should be implemented
for the issues which are not regulated in the decision.
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.
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The New Turkish Commercial Code ("New Code") has been enacted and will enter into force in July 2012. One of the major changes brought by the New Code regards mandatory independent audits of corporations.
The law about payment of dividends has remained substantially unchanged for thirty years.
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