Overview of Accounting and Auditing in Turkey

Turkey has made tremendous progress towards harmonizing its accounting and auditing standards with international practices. Turkey is a major country that spans Europe and Asia. The country has shown that it is committed to raising corporate governance, financial reporting quality and transparency. The Turkish Financial Reporting Standards are responsible for regulating accounting standards in Turkey. These regulations are based on the international accounting standards board's international financial reporting standards (IFRS). The main regulatory body in charge of regulating the auditing standards and the auditing profession in Turkey is the Public Oversight, Accounting and Auditing Standards Authority. Turkey has made significant strides in improving transparency and the calibre of financial reporting by aligning its accounting and auditing standards with international frameworks. 

Accounting Standards in Turkey

The Public Oversight, Accounting and Auditing Standards Authority (KGK) is the regulatory agency for establishing corporate accounting standards in Turkey. It was created in accordance with the statutory decree no 660, which describes the structure and duties of KGK. Turkish Financial Reporting Standards, compliant with IFRS and published by the International Accounting Standards Board, must be used by KGK. All companies in the public interest, including businesses, must adhere to these principles.

Auditing Standards in Turkey

With a few minor adjustments to account for the Turkish context, KGK has developed national standards compliant with the ISAs issued by IAASB. Only individuals or auditing firms approved by KGK may conduct audits. A degree in law, economics, public finance, business administration, public administration, political science, or a degree from an institution abroad that the Turkish Council of Higher Education has approved is required for auditors. In compliance with the applicable rules, they should additionally possess a license as a Certified Public Accountant or Sworn- in Certified Public Accountant. They also need to live in Turkey, be able to sign contracts and have worked as auditors for at least three years.

Types of Audits for Annual Financial Statements

1. Voluntary Audit: A company's financial records, processes, and procedures are examined and evaluated as part of a voluntary audit, which is one that the organization actively pursues. Independent specialists or auditing companies carry it out to give an unbiased assessment of the organization's financial health, internal controls, and compliance with relevant laws and regulations. In a voluntary audit, the organization decides to go through the auditing process on its initiative frequently to establish credibility, increase transparency, or show its dedication to solid financial practices.

The organization aims to give stakeholders, including investors, lenders, or the general public, accurate and trustworthy financial information usually influences the choice to conduct a voluntary audit. The annual financial statements are subject to an audit procedure based on the accounting standards in accordance with Turkish Tax Law regulations. However, it is crucial to remember that no Turkish government requires audited financial statements and reports to be produced for voluntary audits.

2. Statutory Audit: A statutory audit is an obligatory examination of the financial records and statements of an organization or of the government, carried out to confirm their accuracy. By carefully examining several data points, such as bank balances, financial transactions, and accounting necessary papers, a statutory audit aims to determine if an organization offers a truthful and reliable portrayal of its financial situation. The audit strengthens the financial statements' legitimacy and credibility by confirming their accuracy because it is carried out by an impartial organization. It verifies the management's careful performance of their tasks and the observance of non-statutory obligations like corporate governance.

3. Tax Audit: A tax audit is when the tax authorities examine and confirm a taxpayer's financial records and tax returns to make sure they comply with the relevant tax rules and regulations. Government tax authorities thoroughly investigate the veracity and correctness of the taxpayer's claimed income, deductions, credits, and other tax-related data. During a tax audit, tax officials examine the taxpayer's financial records, including income statements, spending records, receipts, invoices, and bank statements. The audit's goal is to find any inconsistencies, mistakes, or any efforts at tax avoidance.

A tax audit's main goals are to guarantee that tax rules are being followed and to advance justice in the tax system. It supports the detection and prevention of tax evasion, safeguards taxpayer money, and upholds the tax system's integrity. By making taxpayers responsible for their tax responsibilities and closing the tax gap, tax audits can help to increase public trust. The quarterly financial statements are examined as part of the tax audit, and a tax auditor verifies them after they have been prepared in accordance with Turkish tax law. It is significant to remember that Turkish law does not require this audit.

Services offered by Enterslice

To meet the demands of our clients, Enterslice provides a wide variety of accounting and auditing services. Among these services are:

• Income Tax Auditing:To verify that income tax laws are being followed, we carry out thorough audits. We assist in locating irregularities and resolving any non-compliance issues by analyzing financial data and carrying out in-depth investigations.
• Internal Audit Services: Our team evaluates and improves organisations' risk management and internal controls frameworks. We pinpoint internal process weaknesses through a methodical, unbiased assessment and offer suggestions on how to tighten controls, reduce risks, and boost operational effectiveness.
• Complete Audit Services: Enterslice is an expert in conducting thorough external audits of businesses' financial accounts. We make sure that financial reporting is transparent and credible while adhering to applicable accounting standards and regulatory requirements.
• Stock Auditing: To confirm the correctness of stock records and the value of stock-in-hand, we do thorough stock audits. We help businesses find discrepancies and put remedial measures in place by examining real inventory and comparing it to records.
• Analysis of Financial Accounts: Enterslice specializes in evaluating and certifying financial accounts to ensure their accuracy, trustworthiness, and compliance with accounting standards. We reassure stakeholders about the fairness and transparency of financial reporting through in-depth reviews and analyses.
• Audit Services in other countries: We help companies with cross-border business operations thanks to our knowledge of international accounting standards and legislation. Our services guarantee consistency and compliance in financial reporting across all countries.
• Virtual Audit Services: We provide clients with remote auditing through our virtual audit services, which embrace digitization. Regardless of regional constraints, we execute audits quickly and efficiently by utilizing technology and secure online platforms.
• Management Audit:We evaluate the effectiveness of management procedures, plans, and controls in management auditing. We support organizations in identifying opportunities for development, putting improvement measures into place, and achieving strategic goals by conducting systematic reviews.
• Accounting Advice & Financial Reporting:Enterslice offers qualified guidance on intricate accounting matters, assists in the creation of financial statements, and assures adherence to accounting standards. We provide technological know-how and useful solutions to assist businesses in producing accurate and reliable financial reporting.