Decree No. 9774, published in Official Gazette No. 32887 of 1 May 2025, sets out the criteria determining which companies will be subject to independent audit from 1 January 2025.
The “Decree Amending the Decree on the Determination of Companies Subject to Independent Audit (Decree No: 9774)”, published in Official Gazette No. 32887 of 1 May 2025, sets out the criteria determining which companies will be subject to independent audit from 1 January 2025.
1) General criteria for being subject to independent audit:
Companies exceeding the thresholds of at least two of the following three criteria in two consecutive accounting periods are subject to independent audit.
- Total assets of TRY 300 million.
- Annual net sales revenue of TRY 600 million.
- 150 employees.
2) Companies subject to independent audit irrespective of any criteria:
The companies listed in List (I) annexed to the Decree are subject to independent audit irrespective of any criteria. These companies are subject to the regulation and supervision of the Capital Markets Board under Law No. 6362.
3) Companies whose capital market instruments are not traded on an exchange or other organised market but which are deemed publicly held under the capital markets legislation:
Companies whose capital market instruments are not traded on an exchange or other organised market but which are deemed publicly held under the capital markets legislation, and which exceed the thresholds of at least two of the following three criteria in two consecutive accounting periods, are subject to independent audit.
- Total assets of TRY 30 million.
- Annual net sales revenue of TRY 40 million.
- 50 employees.
4) Companies listed in annexed List (II): Of the companies listed in List (II) annexed to the Decree, those exceeding the thresholds of at least two of the following three criteria in two consecutive accounting periods are subject to independent audit.
(Banks, rating agencies, financial leasing companies and similar.)
- Total assets of TRY 120 million.
- Annual net sales revenue of TRY 150 million.
- 100 employees.
5) Determination of the thresholds
A company that is subject to independent audit because it exceeded the thresholds ceases to be within the scope of independent audit from the following accounting period if it falls below the thresholds of at least two of the three criteria in two consecutive accounting periods, or if in a single accounting period it falls 20% or more below the thresholds of at least two of those criteria.
In determining whether the thresholds have been exceeded, the financial statements for the last two years prepared under the legislation applicable to the company are taken as the basis for total assets and annual net sales revenue, and the average number of employees over the last two years is taken as the basis for employee numbers.
In determining whether the thresholds have been exceeded, companies are considered together with their subsidiaries and participations. For companies with subsidiaries and participations, the total of the items in the financial statements of the parent and the subsidiary is taken into account for total assets and annual net sales revenue (with intra-group transactions eliminated where applicable), and the total of the average employee numbers of the parent and the subsidiary over the last two years is taken into account for employee numbers. For participations, the items concerned are taken into account in proportion to the company’s shareholding in the participation.
6) Consequences of not having an independent audit carried out:
The consequences for companies subject to independent audit because they exceeded the thresholds of at least two of the three criteria in two consecutive accounting periods, and for the companies specified in the annexed lists, of not having an independent audit carried out are:
- The financial statements are deemed not to have been prepared; they cannot be examined, discussed or approved by the general assembly.
- Profit cannot be distributed.
- Capital cannot be increased or reduced.
- Financial statements cannot be provided to funding companies. A sworn-in CPA or certified public accountant cannot certify the financial statements.
- An administrative fine is imposed under the Turkish Commercial Code.