Independent audit in Turkey is not a service a company chooses. Where the statutory thresholds are met, the audit is compulsory, and financial statements prepared without one are treated as not having been prepared at all. That consequence, rather than a fine, is what makes falling into scope unnoticed the expensive outcome.
This page covers the 2026 thresholds and how the two-year test actually works, which reporting framework applies once a company is in scope, how the auditor is appointed, and what happens when a company that should have been audited was not.
Who Is in Scope
Scope is determined in two separate ways. Most companies fall under the general thresholds; some are in scope regardless of size because of what they do.
| Route into scope | Test |
|---|---|
| General thresholds | Meeting at least two of three criteria — total assets of TRY 500 million or more, net sales of TRY 1 billion or more, 150 or more employees — in two consecutive accounting periods |
| Capital markets | Companies whose shares are traded on the stock exchange, and others subject to capital markets regulation, without threshold |
| Regulated financial sector | Banks, insurance and reinsurance companies, pension companies, factoring, financial leasing and financing companies, payment and electronic money institutions, and capital markets institutions |
| Energy and other licensed sectors | Companies holding licences from the sector regulator, on the thresholds set for them |
| Public interest entities | Entities designated as such, regardless of the general thresholds |
| Other listed categories | Companies in which public bodies hold defined interests and other categories listed in the annexes to the decision |
The figures above apply for 2026. They were TRY 75 million and TRY 150 million a few years ago and have been raised repeatedly since; guidance still quoting those numbers is several revisions out of date.
The direction of travel matters as much as the figures. Because the thresholds rise while company balance sheets rise with inflation, a company can move in and out of scope without its underlying business changing at all. The test should be re-run each year against the figures then in force rather than assumed from the previous year.
The Two-Year Test Runs Backwards
The test looks at the two accounting periods preceding the one to be audited. A company that crossed the thresholds for the first time last year is not yet in scope; a company that crossed them in each of the last two years is in scope for the current period, and the auditor must be appointed before that period ends.
Leaving scope works the same way in reverse: falling below the criteria in two consecutive periods takes the company out. A single weak year does not.
Because the test is backward-looking, a company can determine at the start of the year whether it will be audited for that year. There is no uncertainty to wait out and no reason to discover the obligation after the year has closed.
Companies that discover it late face the problem in its worst form: the auditor has to be appointed and the audit performed on a year already complete, with opening balances that were never audited and records that were not kept with an audit in mind. That is also the most expensive version of the first audit.
Which Reporting Framework Applies
| Framework | Who applies it |
|---|---|
| Turkish Financial Reporting Standards | Public interest entities and companies required to apply them; companies that elect to apply them voluntarily |
| Financial Reporting Standard for Large and Medium-Sized Entities | Companies in scope of independent audit that are not required to apply the full standards |
| Tax-basis statutory books | Continue in parallel for all companies; they are the basis for the tax return, not for the audit opinion |
Coming into scope of independent audit does not replace the statutory books; it adds a reporting framework on top of them. The audited financial statements and the tax return are prepared on different bases and will not agree, and reconciling them becomes a standing part of the closing process.
The first year is where this is felt. Accounting policies have to be selected, opening balances restated onto the new framework, and the differences from the tax basis documented. Companies that treat the first audit as a compliance formality spend the following years re-doing that work.
Appointing the Auditor
- Only firms authorised by the public oversight authority may perform the audit
- The auditor is elected by the general assembly
- Election must take place before the accounting period to be audited ends
- The appointment is registered and announced
- Rotation requirements apply and are stricter for public interest entities
- The auditor may not have provided certain other services to the company
- An auditor who has not been elected in time may be appointed by the court on application
- Certification of tax returns is a separate engagement and is normally held by a different firm
A firm that signs the audit report is restricted from providing certain other services to the same client. Groups that assume their existing accountant or tax adviser can also be the auditor discover the conflict when the appointment deadline is already close.
The practical arrangement is two relationships: one firm for the audit, another for tax compliance and certification. Deciding that at the start of the year, rather than in the last quarter, is what keeps both appointments straightforward.
What Happens If a Company in Scope Is Not Audited
This is the part that changes how the obligation should be treated, and it is absent from most descriptions of it.
What people expect
- Consequence
- An administrative fine
- Severity
- A cost that can be budgeted
- Timing
- Dealt with when it arises
- Effect on the company
- None beyond the payment
What the law provides
- Consequence
- Financial statements and the board’s annual report are deemed not to have been prepared
- Severity
- Not a payment; the documents do not exist in law
- Timing
- Applies to the period concerned and cannot be cured later
- Effect on the company
- Profit distribution, capital transactions and anything resting on those statements are exposed
Everything built on financial statements that are deemed not to have been prepared is built on nothing: the resolution approving them, the dividend distributed on them, the capital increase supported by them. A buyer conducting due diligence finds this immediately, and it is one of the few findings that cannot be fixed by a price adjustment.
How the Audit Runs
- Determine scope for the coming yearRun the two-year test against the thresholds in force. Because the test is backward-looking, the answer is available before the year begins.
- Select the reporting framework and set accounting policiesWhere the company is newly in scope, policies are selected and opening balances restated. Doing this before the year starts rather than after it closes is the single largest determinant of what the first audit costs.
- Elect the auditorBy general assembly resolution, before the period to be audited ends, followed by registration and announcement. Independence is checked against the other services the firm provides to the group.
- Planning and interim workThe auditor plans the engagement, assesses risk and tests controls. Interim work during the year reduces the pressure on the year-end and surfaces issues while they can still be addressed.
- Year-end proceduresConfirmations, inventory attendance, valuation and cut-off testing. Group audits add reporting to and from the component auditors on the group timetable.
- ReportingThe audit report and the opinion, together with the auditor’s report on the board’s annual report. Findings communicated to those charged with governance are addressed before the general assembly, not after.
- General assemblyHeld within three months of the end of the accounting period. The audited statements are presented there, which is what fixes the whole timetable working backwards.
The three-month general assembly deadline is the fixed point. Everything else is scheduled backwards from it, and a company that begins thinking about the audit after the year has closed has already lost most of the available time.
Common Mistakes
- Using outdated thresholds. The figures have been raised several times; TRY 75 million and TRY 150 million are years out of date.
- Testing only the current year. Scope is decided by the two preceding periods, and the same applies in reverse when leaving scope.
- Discovering the obligation after the year closes. The test is backward-looking, so the answer was available before the year began.
- Treating the consequence as a fine. Statements prepared without a required audit are deemed not to have been prepared, and everything resting on them is exposed.
- Appointing the auditor after the period has ended. Election must occur before the period to be audited ends.
- Assuming the existing accountant can be the auditor. Independence requirements restrict which firm can sign.
- Expecting the audited statements to match the tax return. They are prepared on different bases and reconciling them is a standing task.
- Leaving accounting policies and opening balances to the first audit. That is what makes the first audited year the most expensive one.
Frequently Asked Questions
Which companies are subject to independent audit in Turkey?
What are the independent audit thresholds for 2026?
How does the two-year test work?
What happens if a company that should be audited is not?
When must the auditor be appointed?
Can our accountant or tax adviser also be our auditor?
Which reporting framework applies once a company is in scope?
When must the general assembly be held?
As the Ozbek CPA team, we work with companies in scope of independent audit in Turkey — running the two-year scope test against current thresholds, selecting the reporting framework and preparing opening balances before the first audited year, reconciling the audited statements to the tax basis, and coordinating with the auditor and with group reporting timetables. Independence rules mean the audit itself is performed by a separate authorised firm. See also our pages on auditing in Turkey, IFRS and TFRS and internal audit. Contact us.
