The Decision on Determination of Companies Subject to Independent Audit
Hande Betül Yalçın and Selin Coşkun co-authored this article.
Pursuant to the Articles 397 and 398 of the Turkish Commercial Code No. 6102 ("TCC") the companies subject to independent audit shall be determined by the decision of President of the Republic of Turkey. In this context, the criteria and threshold values were determined with the Presidential Decree No. 6434 on Determination of Companies Subject to Independent Audit ("Decree No. 6434") published in the Official Gazette dated 30 November 2022.
The Decree No. 8313 on Amending the Decree on Determination of Companies Subject to Independent Audit (“Decree”) published in the Official Gazette dated 6 April 2024 and the companies subject to audit within the scope of the TCC and the companies excluded from the scope, the independent audit thresholds were re-determined.
The amendments are entered into force on the date of publication which is 06 April 2024, to be applied to the accounting periods of companies starting from 1 January 2024.
Companies Subject to Independent Audit Without Any Criteria
Companies in Annex (I) ( "List (I)") of Decree No. 6434are subject to mandatory independent audit without any criteria. With this Decree, the 6th clause of the List (I) has been amended as follows and institutions included in the clauses 7, 8 and 9 have been added to the same list. As of 01 January 2024, below mentioned companies are subject to independent audit without being subject to any criteria.
Changes Made to List (I) | |
Previous version as per the Decree No. 6434 | Updated Version |
6) Media service provider organizations that have at least one of the following rights or licenses: a. The right to broadcast national television from terrestrial media. b. Satellite television broadcast license. c. Cable television broadcast license targeting multiple cities. | 6) Companies subject to the regulation and supervision of the Radio and Television Supreme Board pursuant to the Radio and Television Organizations and Broadcasting Services Law No. 6112 dated 15 February 2011; a. Media service provider organizations that have at least two of the following rights or licenses: -Right to broadcast national television from terrestrial medium. -Satellite television broadcasting license. -Cable television broadcasting license for multiple provinces. b. Media service provider organizations that have the right to on-demand broadcasting on the internet. |
New Clauses Added to the List (I) | |
7. Companies that have received a license, certificate or authorization from the Energy Market Regulatory Authority and operate subject to the regulations of this Authority and have an independent audit obligation pursuant to the said regulations. 8. Payment institutions and electronic money institutions subject to the regulation and supervision of the Central Bank of the Republic of Turkey pursuant to the Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions Law No. 6493 dated 20 June 2013. 9. Public economic enterprises and their affiliated companies operating within the scope of the Decree Law No. 233 on Public Economic Enterprises dated 08 June 1984. | |
Companies Subject to Threshold
Companies that exceed the threshold values of at least two of the three criteria specified in Article 3 (b) of the Decree No. 6434 fortwo consecutive accounting periods are subject to independent audit. In accordance with the Decree, (i) companies that do not trade their capital market instruments on a stock exchange or other organized markets but are considered public within the scope of the Capital Markets Law("CML") and (ii) companies listed in Annex (II) of Decree No.6434 ("(II) List") no change has been made to the threshold values determined for the companies, while the new threshold values introduced for the companies that are not included in these two groups are determined as below:
- Total assets of 150 million Turkish Liras (Previously; Total assets of 75 million Turkish Liras)
- Annual net sales revenue of 300 million Turkish Liras (Previously, Annual net sales revenue of 150 million Turkish Liras)
- Number of employees: 150 (No change has been made)
In determining whether or not thresholds are exceeded, companies are considered together with their affiliates and subsidiaries.
Changes Made to (II) List
Companies listed in (II) List that exceed the threshold values of at least two of the criteria specified in the Decree are subject to mandatory independent audit. While no changes have been made to these threshold values, the scope of the (II) List has been updated as follows:
Changes Made to (II) List | |
Previous version as per the Decree No. 6434 | Updated New List |
1. Companies directly or indirectly belongs to public institutional professional organisations, trade unions, associations, foundations, cooperatives and their supreme organisations by at least 25%. 2. Companies that publish daily newspapers nationwide. 3. Except for call center companies, companies subject to the regulation and supervision of the Information and Communication Technologies Authority within the scope of the Electronic Signature Law No. 5070 dated 15 January 2004, Electronic Communication Law No. 5809 dated 05 November 2008, Postal Services Law No. 6475 dated 09 May 2013 and Article 1525 of the Law No. 6102. 4. Companies that obtain license, certificate or authorization certificate from the Energy Market Regulatory Authority and operate subject to the regulations of this Authority and are not exempted from independent audit pursuant to the said regulations. 5. Except for those covered by the list numbered (I); (a) Subsidiaries of the SDIF, except for the subsidiaries and companies that are inactive or whose activities have been temporarily suspended or cancelled (including those whose necessary articles of association amendments and similar procedures have not yet been carried out), and companies whose audit and management have been taken over by the SDIF within the scope of the abrogated Banking Law No. 4389 and Law No. 5411. (b) State-owned economic enterprises and their subsidiaries operating within the scope of the Decree Law on State Economic Enterprises dated 08 June 1984 and No. 233, and companies at least 50% of the capital of which is owned by municipalities. | 1. Companies subject to the regulation and audit of the Information and Communication Technologies Authority within the scope of the Electronic Signature Law No. 5070 dated 15 January 2004, Electronic Communication Law No. 5809 dated 5 November 2008, Postal Services Law No. 6475 dated 9 May 2013 and Article 1525 of the Law No. 6102, excluding call center companies. 2. Except for the subsidiaries and companies that are inactive or whose activities have been temporarily suspended or cancelled (including those whose necessary articles of association amendments and similar procedures have not yet been carried out), the subsidiaries of the Savings Deposit Insurance Fund (“SDIF or TMSF”) and the companies whose supervision and management have been taken over by the SDIF within the scope of the abrogated Banking Law No. 4389 and Law No. 5411. 3. Companies with at least 50% of their capital belonging to municipalities. |
Companies Excluded from the Independent Audit
Companies excluded from the scope of mandatory independent audit as defined in Decree No.6434 Article 4 (a) and (b) are amended. With the Decree, the companies that are excluded from the scope of mandatory independent audit are as follows:
- Companies subject to the Law on Privatization Applications No. 4046 dated 24 November 1994, except for those included in clause 1 to 8 of (I) List of Decree No. 6434.
- Companies in which at least 50% of the capital is directly or indirectly owned by the state, provincial special administrations, foundations established by law and other public institutions and organizations, except for those listed in (I) List of Decree No. 6434 and those listed in clause 3 of (II) List of the same Decree.
- Savings finance companies whose liquidation was decided by the Banking Regulation and Supervision Authority (BDDK) within the scope of Article 7/4 of the Law on Financial Leasing, Factoring, Financing and Savings Finance Companies No. 6361 dated 21 November 2012 and whose liquidation process is carried out by the liquidation commissions appointed by the Savings Deposit Insurance Fund (TMSF).
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