Client Alert:

THRESHOLDS DOUBLED FOR MANDATORY INDEPENDENT AUDITS

THRESHOLDS DOUBLED FOR MANDATORY INDEPENDENT AUDITS

Companies subject to mandatory independent audit are determined by the President as per Article 397/4 of the Turkish Commercial Code numbered 6102. Recently, the Decision on the Determination of Companies Subject to Independent Audit (“Decision”) was published in the Official Gazette dated 30 November 2022, on the thresholds and the list of the companies subject to independent audit.

The Decision revised the thresholds and the list of companies stipulated in the previous decision1 dated 2018, and some companies have been exempted from independent audit.

The abovementioned changes can be briefly summarized in the tables below:

I. Changes in Thresholds

1. Thresholds for companies whose capital market instruments are not traded in a stock exchange or other organized markets, but are considered publicly traded under the Capital Markets Law2:

2018 2022
Total value of assets: 15 million Turkish Liras and above Total value of assets: 30 million Turkish Liras and above
Net annual sales proceeds: 20 million Turkish Liras and above Net annual sales proceeds: 40 million Turkish Liras and above

2. Thresholds for companies specified in list (II)* attached to the Decision:

* This list is the same as in 2018, except for one change, and the change will be indicated below.

2018 2022
Total value of assets: 30 million Turkish Liras and above Total value of assets: 60 million Turkish Liras and above
Net annual sales proceeds: 40 million Turkish Liras and above Net annual sales proceeds: 80 million Turkish Liras and above
Number of employees: 125 and above Number of employees: 100 and above

3. Threshold values for other companies not covered in scope of 1 and 2 above

2018 2022
Total value of assets: 35 million Turkish Liras and above Total value of assets: 75 million Turkish Liras and above
Net annual sales proceeds: 70 million Turkish Liras and above Net annual sales proceeds: 150 million Turkish Liras and above
Number of employees: 175 and above Number of employees: 150 and above

II. Changes in Lists (I) and (II) Attached to the Decision

1. Savings finance companies have been added to list (I) attached to the Decision.

2. Companies exempted from independent audit pursuant to the regulations of the Energy Market Regulatory Authority have been excluded from list (II) attached to the Decision.

III. Change in Companies Exempted from Independent Audit

Savings finance companies, whose liquidation was determined by the Banking Regulation and Supervision Agency within the scope of the 4th paragraph of the Temporary Article 7 of the Leasing, Factoring, Financing, and Savings Finance Companies Law3, and whose liquidation process was carried out by the liquidation commissions appointed by the Savings Deposit Insurance Fund of Turkey, are exempted from independent auditing.

You can reach the President's Decision on the Determination of Companies Subject to Independent Audit (in Turkish) via this link.

1 Number 2018/11597, dated 26.03.2018 and published in the Official Gazette dated 26.05.2018. The decision was put in effect starting from 01.01.2018.

2 Number 6362, dated 06.12.2012 and published in the Official Gazette dated 30.12.2012.

3 Number 6361, dated 21.11.2012 and published in the Official Gazette dated 13.12.2012.

Please do not hesitate to contact us should you require further information and clarification.

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