Independent audit in Turkey is not a matter of choice for companies above the statutory thresholds, and the consequence of not being audited is more serious than a penalty: financial statements that should have been audited but were not are treated as never having been prepared. The thresholds were raised for financial years beginning on or after 1 January 2026, which takes some companies out of scope and brings others in.
Who Is Subject to Independent Audit
A company outside the specifically listed sectors becomes subject to audit where it exceeds at least two of three criteria in two consecutive financial years. The criteria were raised with effect from financial years beginning on or after 1 January 2026.
| Criterion | From 2026 | Previously |
|---|---|---|
| Total assets | TRY 500 million | TRY 300 million |
| Annual net sales | TRY 1 billion | TRY 600 million |
| Number of employees | 150 | 150 |
Entry and exit work on the same two-year rule. A company falling below the criteria in two consecutive years leaves the scope of audit; one exceeding them in two consecutive years enters it from the following financial year. Because the test looks back, the position for a given year is determined by figures the company already holds — so it can and should be established before the year begins, not when the auditor is being appointed.
Separately, companies in specifically listed sectors are subject to audit regardless of size. These include entities subject to capital markets legislation, banks, insurance and reinsurance companies, financial leasing, factoring and financing companies, asset management companies, pension companies, and companies licensed by the energy regulator and certain other regulators.
Where a company is subject to audit and does not have its financial statements audited, those statements and the board’s annual activity report are deemed not to have been prepared. This is not a fine; it is a legal nullity, and everything resting on those statements rests on nothing.
The consequences follow quickly. A general assembly resolution approving the accounts and distributing a dividend is built on statements that do not legally exist. Bank facilities and tender submissions relying on audited figures cannot be supported. A buyer’s due diligence team finds a gap in the record that cannot be closed retrospectively. Arranging the audit after the event does not cure it — the appointment has to be made in time.
Which Reporting Framework Applies
Being subject to audit changes the financial reporting framework as well, and this is the part most often missed. Statutory books remain on the tax basis under the uniform chart of accounts, while the financial statements presented for audit are prepared under a separate framework.
| Framework | Applies to |
|---|---|
| Turkish Financial Reporting Standards | Public interest entities — listed companies, banks, insurance companies and similar — and companies electing to apply them. Fully converged with the international standards |
| Standard for large and medium-sized entities | Companies subject to audit but not required to apply the full standards. Simpler recognition and measurement, and the default for most audited private companies |
| Tax legislation basis | The statutory books themselves, which continue under the uniform chart of accounts whichever framework is used for the audit |
The result is a company keeping one set of books and reporting under a different measurement framework, with a reconciliation between the two. Depreciation, provisions, financial instruments, leases and, where the conditions are met, inflation adjustment all differ. Where a group already reports under the international standards, the mapping usually starts there rather than from the statutory books.
Appointment, Independence and Rotation
The auditor is appointed by the general assembly for each financial period and must be appointed before that period ends. Where no appointment is made, the court appoints an auditor on application. Audits may only be carried out by audit firms and auditors authorised by the public oversight board; a certified public accountant who is not so authorised cannot sign an independent audit report.
Rotation applies to public interest entities: an auditor who has audited the company for seven years within the last ten cannot be reappointed until three years have passed. Independence requirements also restrict the auditor from providing certain other services to the same client, which is why the audit engagement and the accounting or tax compliance engagement are normally held by different firms.
Independent Audit Is Not the Only Assurance Work
Several distinct services are routinely confused with one another, and choosing the wrong one wastes both time and fees.
| Engagement | Purpose | Who performs it |
|---|---|---|
| Independent audit | Opinion on whether the financial statements give a true and fair view under the applicable framework | An audit firm authorised by the public oversight board |
| Full certification of tax returns | Certification of the corporate tax return and its supporting accounts, with the certifying professional accepting joint responsibility | A sworn-in certified public accountant |
| Certification reports for refunds and exemptions | Supporting a value added tax refund, an exemption or an incentive above the applicable threshold | A sworn-in certified public accountant |
| Internal audit | Continuous review of internal controls, processes and compliance, reporting to management or the board | An internal function or an outsourced provider |
| Fraud investigation | Examination of a specific suspicion or incident, with findings prepared to an evidential standard | A specialist team, independent of the routine engagement |
| Due diligence | Assessment of a target’s financial position for a transaction | An advisory team, not the statutory auditor |
A company subject to independent audit still needs the tax certification work separately where its own thresholds are met, because the two engagements answer different questions to different authorities. Conversely, a company below the audit thresholds may still require a certification report to obtain a refund, and that is not an audit.
What to Settle Before the Year Begins
- Whether the two-year test is met on current figures
- Which reporting framework will apply
- Opening balances under that framework, for a first audited year
- Appointment of the auditor before the period ends
- Independence constraints across the group’s other engagements
- Reconciliation between statutory books and reported figures
- General assembly timetable, within three months of period end
- Whether a tax certification engagement is also required
Entering the scope of audit for the first time means preparing opening balances under a framework the company has not used before, restating comparatives, and documenting judgements that were never documented because nobody asked. Companies that discover this when the auditor arrives lose the timetable; companies that establish the position a year ahead treat it as a project.
Because the test is backward-looking, the answer for next year is already contained in figures the company holds today. It costs an afternoon to check.
Frequently Asked Questions
Which companies must have an independent audit in Turkey?
Have the audit thresholds changed?
What happens if a company subject to audit is not audited?
Which financial reporting framework applies to an audited company?
Who can carry out an independent audit in Turkey?
Does auditor rotation apply in Turkey?
Is an independent audit the same as certification of tax returns?
When must the auditor be appointed?
As the Ozbek CPA team, we work with companies approaching or already within the scope of independent audit in Turkey — establishing whether the two-year test is met, selecting the reporting framework, preparing opening balances and comparatives for a first audited year, maintaining the reconciliation between statutory books and reported figures, and providing the tax certification work that sits alongside the audit rather than within it. Contact us.
