What is Bagimsiz Denetim?

Bagimsiz Denetim (independent audit) in Turkey is governed by the Bagimsiz Denetim Yonetmeligi issued by the Kamu Gozetimi, Muhasebe ve Denetim Standartlari Kurumu (KGK — Public Oversight, Accounting and Auditing Standards Authority). It was introduced under Presidential Decree No. 660 in 2011 and expanded progressively.\n\n**Who is required to have an independent audit**\nThe Council of Ministers (now Presidential Cabinet) determines the scope of mandatory audit by decree. Current thresholds require audit for two consecutive years if the company meets two of these three criteria:\n- Balance sheet total: TRY 75,000,000 or above\n- Net annual sales: TRY 150,000,000 or above\n- Average number of employees: 250 or above\n\nAdditionally, regardless of size, all publicly traded Anonim Sirkets, banks, insurance companies, leasing companies, factoring companies, and capital market intermediaries must be audited. Subsidiaries of companies that meet consolidation thresholds are also drawn in.\n\n**Auditing standards**\nTurkey has adopted Turkish Auditing Standards (TDS) which are direct translations of International Standards on Auditing (ISA). KGK accredits audit firms and individual auditors; unauthorised firms cannot conduct Bagimsiz Denetim. The Big Four and major Turkish audit firms (Mazars, Grant Thornton, BDO, KPMG, Deloitte, EY, PwC) are all KGK-accredited.\n\n**Impact on financial reporting**\nCompanies subject to Bagimsiz Denetim must prepare their financial statements under Turkish Accounting Standards (TMS) and Turkish Financial Reporting Standards (TFRS) — the Turkish equivalents of IFRS. Companies below audit thresholds can use the simplified Big Enterprise Standard (BOBi FRS) or the standard for Small and Medium Enterprises (KOBi TFRS).\n\n**Connection to tax returns**\nFor companies subject to Bagimsiz Denetim, the audited financial statements form the basis for the Kurumlar Vergisi declaration. The annual KV return filing deadline is extended to the end of April, and the Revenue Administration may request the audited accounts as supporting documentation. The Turkish Trade Registry Gazette publishes audited accounts for limited and public companies.\n\n**Penalty for non-compliance**\nCompanies required to undergo Bagimsiz Denetim but failing to do so face administrative fines and the potential rejection of unaudited accounts for tax return purposes. Directors can also be held personally liable for misrepresentation in accounts that should have been audited.