Statutory Audit in Turkey: Requirements and Audit Thresholds

A Turkish company may need a statutory independent audit because of its sector, public-interest status or financial size. For financial years beginning on or after 1 January 2026, Turkey raised the general asset and net-sales thresholds. The change does not create a simple “turnover-only” test: the company category, two consecutive reference periods, subsidiaries, associates and average employee count must all be reviewed.

What is a statutory audit in Turkey?

A statutory audit is an independent examination of a company’s financial statements under the Turkish Commercial Code (Türk Ticaret Kanunu, or TCC), the Presidential Decision on companies subject to audit and the Turkish Standards on Auditing issued by the Public Oversight, Accounting and Auditing Standards Authority (Kamu Gözetimi, Muhasebe ve Denetim Standartları Kurumu, or KGK).

The auditor seeks reasonable—not absolute—assurance that the financial statements are free from material misstatement, whether caused by error or fraud, and issues an independent opinion. This is different from bookkeeping, preparation of tax returns, a tax inspection or an internal audit.

Which companies are subject to audit in 2026?

KGK groups companies into four categories. Identifying the correct category comes before applying any figures.

The 2026 figures above are the thresholds stated by KGK for financial years beginning on or after 1 January 2026. The general total-assets and net-sales figures were increased by Presidential Decision No. 11066, published on 17 March 2026; the general employee threshold remained unchanged.

Annex I: companies audited regardless of size

Annex I captures specified public-interest and regulated entities without applying the three size thresholds. Depending on the exact statutory description, the list includes categories such as:

• banks and specified financial-market institutions;

• insurance, reinsurance and pension companies;

• payment institutions and electronic-money institutions regulated by the Central Bank of the Republic of Türkiye;

• specified energy-market companies with a sectoral audit requirement;

• specified media service providers;

• state economic enterprises and specified subsidiaries; and

• from 2026, qualifying domestic natural-gas companies in which state economic enterprises directly or indirectly own more than 50% of the capital.

A licence alone does not always place an entity in Annex I: the wording of the relevant line and the sector regulator’s audit rules must be checked. Conversely, an entity outside the direct list can still be audited under another category’s thresholds.

How the two-of-three, two-year test works

For companies subject to thresholds, audit scope begins in the financial year following two consecutive reference years in which at least two criteria were exceeded. The same two criteria do not have to be exceeded in both years.

1. Choose the target year. For a calendar-year company, the target is 1 January–31 December 2026.

2. Identify the category. Check Annex I, Annex II, deemed-public status and the general group in that order.

3. Use the target year’s thresholds. Apply the thresholds effective for 2026 to the two reference periods, 2024 and 2025.

4. Aggregate correctly. Include qualifying subsidiaries and associates, including foreign entities, and eliminate relevant intragroup amounts.

5. Test each year separately. Mark which criteria are exceeded in each reference period.

6. Document the conclusion. Retain the calculation, source financial statements, group chart and employee schedule.

How group figures are calculated

A Turkish entity should not test only its standalone trial balance where it has subsidiaries or associates. The KGK Procedures and Principles require a broader calculation.

For the employee test, monthly figures reported in the withholding and premium service return are added and divided by 12. Apprentices and students undertaking vocational training under the specified contracts are excluded. Long-term construction and repair businesses also have special adjustments for specified work-in-progress and progress-payment accounts.

Which financial statements are used?

A company entering scope for the first time generally uses the balance sheets and income statements prepared for public authorities under tax legislation for the last two periods, subject to KGK’s aggregation and adjustment rules. Once in scope, the subsequent assessment uses financial statements prepared under the applicable Turkish Accounting Standards framework.

A company already applying full Turkish Financial Reporting Standards (TFRS) uses those statements; many non-public-interest entities in statutory audit apply the Financial Reporting Standard for Large and Medium-Sized Enterprises (Büyük ve Orta Boy İşletmeler İçin Finansal Raporlama Standardı, or BOBİ FRS). The correct framework depends on KGK rules and entity status, not solely on foreign ownership or a parent company’s IFRS reporting package.

Does foreign ownership change the audit test?

No general exemption or automatic inclusion arises merely because a Turkish company has foreign shareholders. A foreign-owned Turkish limited liability company (Ltd. Şti.) or joint-stock company (A.Ş.) is assessed under the same category and threshold logic, unless its regulated activity places it in a special group.

Foreign groups should nevertheless pay close attention to the aggregation rules, local statutory framework and audit timing. A parent’s group audit or overseas auditor’s report does not automatically satisfy the Turkish company’s statutory audit obligation. For wider setup and compliance context, see our Turkey business tax and accounting guide for investors.

How is the statutory auditor appointed?

Under Article 399 of the Turkish Commercial Code, the general assembly selects the auditor; for a group audit, the parent company’s general assembly selects the group auditor. This authority generally cannot be delegated to the board.

• The appointment should be made before the beginning of the fourth month of the financial year and, in every case, before the end of the financial year being audited.

• For a calendar-year company, the ordinary target is therefore to complete the selection before 1 April.

• The appointment must be registered with the trade registry and announced in the Turkish Trade Registry Gazette without delay; the company website requirement should also be checked.

• The auditor or audit firm must hold the relevant KGK authorisation and be independent of the company.

• If the competent corporate body does not appoint an auditor, the commercial court may appoint one upon a qualifying application.

What does the audit process cover?

The 2026 audit is performed under the 2026 Turkish Standards on Auditing set published by KGK. The process is risk-based; it is not a transaction-by-transaction guarantee.

1. Acceptance and independence: the auditor evaluates eligibility, conflicts, independence and engagement terms.

2. Planning and materiality: the business, group, systems, internal controls and material misstatement risks are assessed.

3. Audit evidence: procedures may include sampling, external confirmations, inventory observation, recalculation, document inspection, analytics and IT-related work.

4. Completion: identified misstatements, subsequent events, going concern, related parties and management representations are evaluated.

5. Reporting: the auditor issues an opinion and communicates relevant control deficiencies and governance matters.

The opinion may be unmodified, qualified, adverse or a disclaimer of opinion, depending on the nature and pervasiveness of misstatements or evidence limitations. An audit opinion is not a certification that the company has no tax exposure, fraud or future financial difficulty.

How does a company leave audit scope?

A company that entered audit because it exceeded thresholds generally leaves scope from the following period when either of these tests is met:

• Two-period route: at least two criteria remain below their thresholds in each of two consecutive periods. The same two criteria do not have to be below the threshold in both years.

• 20% route: in one period, at least two criteria are 20% or more below their thresholds.

This exit mechanism applies to companies that entered because of threshold tests. A company directly in scope under Annex I must reassess the legal basis for its direct inclusion rather than relying only on the size-based exit calculation.

What happens if a required audit is not completed?

Under the Turkish Commercial Code, financial statements and the board’s annual report that are legally subject to audit but are not audited are treated as not having been prepared. This can disrupt general assembly approvals, profit distributions, financing, tenders, regulatory filings, group reporting and corporate transactions. It can also expose directors and managers to governance and liability risks.

KGK does not have to send a company an individual notice before the legal obligation exists. Management should perform and retain its own scope assessment, then cross-check the result through KGK’s Company Audit Status Query system.

Audit-readiness checklist

• ☐ Confirm the company’s 2026 audit category before applying thresholds.

• ☐ Prepare a 2024–2025 two-year test using documented source figures.

• ☐ Include Turkish and foreign subsidiaries and associates correctly.

• ☐ Reconcile monthly employee returns and calculate the annual average.

• ☐ Determine whether TFRS or BOBİ FRS applies.

• ☐ Complete the general assembly appointment, registration and announcement.

• ☐ Build a year-end timetable for inventory, confirmations and closing entries.

• ☐ Reconcile statutory ledgers, tax returns and group reporting packages.

• ☐ Preserve contracts, invoices, e-ledgers, corporate books and supporting evidence.

Record retention and audit evidence should be planned together. Our guide to statutory books and accounting records in Turkey explains the supporting-document and archive controls that make an audit more efficient.

Official sources

• Official Gazette — Presidential Decision No. 11066, 17 March 2026

• KGK — Announcement on the 2026 amendment and general thresholds

• KGK — Which companies are subject to independent audit?

• KGK — Current Procedures and Principles for determining audit scope

• Legislation Information System — Turkish Commercial Code No. 6102

• KGK — 2026 Turkish Standards on Auditing set