Do I Need a Statutory Audit in Turkey? 2026 Thresholds Explained for Foreign-Owned Companies
When does a Turkish subsidiary have to appoint an independent auditor? The 2026 thresholds, the two-of-three and two-year rules, and how to prepare — explained by a licensed Turkish CPA who coordinates with auditors every year.
- Most companies must have an independent audit if they exceed two of three thresholds — total assets TRY 500 million, net sales TRY 1 billion, 150 employees — in two consecutive years (thresholds for fiscal periods from 1 January 2026).
- Some categories (for example certain regulated or listed-group companies) have lower thresholds.
- Audit obligation starts in the year after the two qualifying years; release follows the same logic in reverse (or a 20% drop below two thresholds in one year).
- The auditor must be authorised by KGK (Turkish Commercial Code Art. 400) and appointed by the general assembly.
- Most foreign-owned SMEs are below the thresholds — but group auditors may still ask for reviews or reporting packs.
Not sure if your Turkish company needs an audit? Send us total assets, net sales and headcount for the last two years. A licensed CPA replies personally with your audit position and timeline.
WhatsApp a CPACheck my audit obligationKey facts: statutory audit in Turkey (2026)
| Item | Rule | Legal basis |
|---|---|---|
| General thresholds | Assets TRY 500m; net sales TRY 1bn; 150 employees | Decision on companies subject to independent audit (as amended, 2026) |
| Test | Exceed two of three thresholds in two consecutive years | Same decision |
| Start | Fiscal year after the two qualifying years | Same decision |
| Release | Below two thresholds for two years, or 20% below two thresholds in one year | Same decision |
| Who audits | KGK-authorised independent auditors | Turkish Commercial Code Arts. 397, 400 |
| Framework | TFRS or BOBİ FRS depending on entity type | KGK standards |
When does a company in Turkey need a statutory audit?
Answer: A Turkish company generally needs an independent statutory audit when it exceeds at least two of three thresholds — total assets of TRY 500 million, net sales of TRY 1 billion and 150 employees — in two consecutive years. The audit obligation then starts from the following year, with a KGK-authorised auditor appointed by the general assembly. Some categories have lower thresholds.
Check your numbers now: Turkey statutory audit threshold checker.
SYSTEMS CPA — audit-ready Turkish books
We monitor your thresholds every year and keep the books ready for whichever auditor you appoint.
- Annual threshold monitoring so the obligation never surprises you.
- Audit-ready closing: reconciliations, schedules and TFRS/BOBİ FRS statements.
- Auditor coordination with your group auditor or a KGK-authorised local auditor.
- Group reporting bridge for IFRS or US GAAP.
- A licensed CPA keeps the books. Evren Özmen, CPA, TÜRMOB Reg. No. 35675.
Statutory audit vs group audit for a Turkish subsidiary
| Criterion | Turkish statutory audit | Group audit procedures |
|---|---|---|
| Required by | Turkish law above thresholds | Parent’s auditor |
| Framework | TFRS / BOBİ FRS | IFRS / US GAAP group reporting |
| Auditor | KGK-authorised firm | Group auditor or its Turkish network firm |
| Applies below thresholds? | No | Possibly, if Turkey is material to the group |
What drives the cost of a statutory audit?
| Driver | Why it matters |
|---|---|
| Company size and complexity | More transactions and entities mean more audit work |
| Quality of books | Clean reconciliations reduce audit hours |
| Framework | TFRS requires more disclosure than BOBİ FRS |
| Group requirements | Combined statutory and group procedures |
| Timing | Compressed deadlines increase cost |
Case analysis: the audit nobody noticed
Facts (anonymised, illustrative of a typical engagement): A fast-growing foreign-owned distributor crossed the net-sales and asset thresholds in two consecutive years. Nobody tracked it.
The obvious answer: audits are for large companies; we are still small.
Why it failed: the company entered the audit regime without an appointed auditor, and the first audit found unreconciled balances that delayed approval of the financial statements.
Structure adopted: annual threshold monitoring, auditor appointment at the general assembly, and an audit-ready closing calendar.
What happens if…
What happens if my company exceeds the thresholds but does not appoint an auditor?
The financial statements and annual report of a company subject to audit are not considered prepared without the audit report (TCC Art. 397), and general assembly decisions based on them can be challenged.
What happens if I exceed thresholds in only one year?
No audit obligation yet; the test requires two consecutive years.
What happens if my company shrinks?
You leave the regime after falling below two thresholds for two consecutive years, or after falling at least 20% below two thresholds in one year.
What happens if my group auditor wants an audit below the thresholds?
That is a group requirement, not a Turkish legal one, but it still needs audit-ready books.
Audit thresholds: Turkey vs other countries
| Country | Audit threshold approach |
|---|---|
| Turkey | Two of three thresholds for two consecutive years |
| European Union | Size criteria under the Accounting Directive, set by each member state |
| United Kingdom | Small-company exemption based on turnover, assets and employees |
| UAE | Audit requirements vary by free zone and company type |
Frequently asked questions
What are the 2026 audit thresholds in Turkey?
For most companies: total assets TRY 500 million, net sales TRY 1 billion and 150 employees — exceeding two of three in two consecutive years triggers an audit.
Do all Turkish companies need an audit?
No. Most foreign-owned SMEs are below the thresholds and do not need a statutory audit.
Who can audit a Turkish company?
Only independent auditors and audit firms authorised by KGK (TCC Art. 400).
Can my group auditor audit the Turkish subsidiary?
Yes, if its Turkish firm is KGK-authorised.
Evren Özmen’s view from practice
Thresholds are crossed quietly — especially in high-inflation years when TRY figures grow fast. I check every foreign client’s numbers against the thresholds at each year-end, so the first audit is planned, not discovered.
Primary sources
- Turkish Commercial Code No. 6102 (Arts. 397, 400) — mevzuat.gov.tr
- Public Oversight Authority (KGK) — kgk.gov.tr
- Official Gazette — decision on companies subject to independent audit (as amended) — resmigazete.gov.tr
- EY Turkey — 2026 independent audit criteria
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