Mandatory Audit Thresholds in Turkey (2026 Legal Guide)

Learn the mandatory independent audit thresholds in Turkey for 2026. Discover updated asset, revenue, and employee criteria, foreign investor obligations, corporate compliance requirements, and legal consequences of failing to comply with audit regulations.

Independent auditing remains one of the most important corporate governance requirements under Turkish Commercial Law. In 2026, significant amendments were introduced regarding the financial thresholds used to determine whether companies are subject to mandatory independent audit. These changes affect thousands of Turkish and foreign-owned companies operating in Turkey and have important implications for financial reporting, regulatory compliance, corporate governance, investment transactions, and banking relationships.

For foreign investors establishing a company in Turkey, acquiring an existing business, or managing a Turkish subsidiary, understanding independent audit obligations is essential. Failure to comply with audit requirements may create legal, regulatory, and commercial risks that could negatively affect business operations and investor confidence.

Legal Basis for Independent Audits in Turkey

The legal foundation of independent auditing is primarily established by the Turkish Commercial Code, particularly Article 397 and related regulations concerning companies subject to mandatory independent audit. The framework is supplemented by Presidential Decisions and regulations issued by the Public Oversight, Accounting and Auditing Standards Authority.

The objective of independent auditing is to ensure that financial statements accurately reflect the financial position of companies and comply with applicable accounting standards.

Independent audits strengthen transparency, improve investor confidence, and support the integrity of commercial activities.

Major Changes Introduced in 2026

A Presidential Decision published in the Official Gazette on 17 March 2026 significantly increased the general thresholds used to determine whether companies are subject to mandatory independent audit. These revised thresholds apply to fiscal periods beginning on or after 1 January 2026.

The amendments were introduced primarily to reduce the audit burden on smaller and medium-sized enterprises while maintaining oversight of larger businesses.

As a result, many companies that would previously have been subject to mandatory audits may now fall outside the audit scope.

General Audit Thresholds Applicable in 2026

For companies that are not specifically included in special categories or annexed lists, the general thresholds applicable in 2026 are:

Criterion	2026 Threshold
Total Assets	TRY 500 Million
Annual Net Sales Revenue	TRY 1 Billion
Average Number of Employees	150 Employees

A company becomes subject to mandatory independent audit if it exceeds at least two of the above three criteria during two consecutive accounting periods.

This represents a substantial increase compared to the previous thresholds of TRY 300 million in assets and TRY 600 million in annual revenue.

Two-Out-of-Three Rule Explained

Many foreign investors misunderstand how audit thresholds operate.

A company does not become subject to independent audit simply because it exceeds one threshold.

Instead, the company must exceed at least two of the three criteria:

• Total assets
• Annual net sales revenue
• Employee count

Additionally, these thresholds must be exceeded for two consecutive accounting periods before the company becomes subject to mandatory audit.

For example:

Year 1

• Assets: TRY 600 million
• Revenue: TRY 1.2 billion
• Employees: 120

Year 2

• Assets: TRY 700 million
• Revenue: TRY 1.4 billion
• Employees: 130

The company exceeds two criteria in both years and therefore becomes subject to independent audit in the following accounting period.

Do the Same Two Criteria Need to Be Exceeded?

No.

Recent clarifications issued in 2026 confirmed that the same two criteria do not need to be exceeded in consecutive years.

For example:

First Year

• Assets exceed threshold
• Employee count exceeds threshold

Second Year

• Assets exceed threshold
• Revenue exceeds threshold

In this scenario, the company still satisfies the requirement because two criteria were exceeded in each accounting period.

This clarification is particularly important for growing companies with fluctuating financial indicators.

Companies Subject to Audit Regardless of Thresholds

Certain companies are subject to independent audit regardless of their size or financial figures.

Examples commonly include:

• Banks
• Financial institutions
• Insurance companies
• Reinsurance companies
• Pension companies
• Capital market institutions
• Publicly regulated entities
• Certain energy companies
• Precious metals businesses
• Media service providers
• State economic enterprises and certain affiliated companies

Companies operating within these sectors should assume that independent audit obligations apply regardless of revenue or asset levels.

Special Thresholds for Publicly Held Companies

Companies whose securities are not listed on a stock exchange but are deemed publicly held under capital markets legislation remain subject to lower thresholds.

The applicable criteria remain:

Criterion	Threshold
Total Assets	TRY 30 Million
Annual Net Sales Revenue	TRY 40 Million
Employees	50

These thresholds were not modified by the March 2026 amendments.

As a result, many publicly held companies remain subject to mandatory audits despite the general threshold increases.

Special Thresholds for Annex II Companies

Companies listed under Annex II of the relevant Presidential Decision remain subject to separate thresholds.

The applicable figures are:

Criterion	Threshold
Total Assets	TRY 120 Million
Annual Net Sales Revenue	TRY 150 Million
Employees	100

These thresholds were likewise not amended in March 2026.

Businesses operating within categories covered by Annex II should carefully assess their status.

Group Companies and Consolidated Calculations

When determining whether audit thresholds have been exceeded, companies must often consider consolidated group figures.

For companies with subsidiaries or affiliates:

• Assets may be assessed on a consolidated basis.
• Revenue may be calculated on a consolidated basis.
• Employee numbers may be evaluated across the group structure.

Intra-group transactions are generally excluded where applicable.

Foreign investors operating multiple Turkish entities should therefore evaluate group-wide financial data rather than reviewing each company in isolation.

Consequences of Becoming Subject to Audit

Once a company falls within the mandatory audit scope, several obligations arise.

The company must:

• Appoint an independent auditor
• Maintain compliant accounting systems
• Prepare auditable financial statements
• Cooperate with audit procedures
• Preserve corporate records
• Comply with Turkish auditing standards

Independent audit reports may also be required during:

• Investment transactions
• Share transfers
• Mergers and acquisitions
• Financing arrangements
• Regulatory reviews

Audit compliance therefore extends beyond simple legal formalities.

Consequences of Non-Compliance

Failure to comply with audit obligations may create substantial risks.

Potential consequences include:

• Regulatory sanctions
• Corporate governance concerns
• Financing difficulties
• Investor disputes
• Shareholder claims
• Increased regulatory scrutiny
• Reduced credibility with banks and investors

Non-compliance may also affect the validity and reliability of financial reporting processes.

Companies should therefore monitor audit status carefully and appoint auditors promptly when required.

Independent Audits and Foreign Investors

Independent auditing is particularly important for foreign investors.

International investors frequently require audited financial statements before:

• Acquiring Turkish companies
• Investing in startups
• Providing financing
• Entering joint ventures
• Conducting due diligence reviews

Audited financial information provides greater confidence regarding:

• Financial health
• Corporate governance
• Regulatory compliance
• Risk exposure

Companies seeking foreign investment often choose voluntary audits even when mandatory audit requirements do not apply.

How Companies Can Prepare for Audit Requirements

Businesses should adopt proactive compliance strategies.

Recommended measures include:

• Annual threshold assessments
• Internal financial reviews
• Accurate accounting systems
• Proper record retention
• Corporate governance procedures
• Independent compliance reviews
• Internal audit functions
• Employee training programs

Regular monitoring helps businesses identify audit obligations before compliance deadlines arise.

Frequently Asked Questions (FAQ)

1. What are the general independent audit thresholds in Turkey for 2026?

The general thresholds are TRY 500 million in total assets, TRY 1 billion in annual net sales revenue, and 150 employees.

2. How many thresholds must be exceeded?

A company must exceed at least two of the three criteria.

3. Must the thresholds be exceeded for two consecutive years?

Yes. The criteria must be exceeded during two consecutive accounting periods.

4. Do the same two criteria need to be exceeded each year?

No. Different combinations of criteria may satisfy the requirement.

5. Are banks always subject to independent audit?

Yes. Banks and many regulated financial institutions are audited regardless of thresholds.

6. Are foreign-owned companies exempt from audit requirements?

No. Foreign-owned companies are subject to the same audit rules applicable to Turkish companies.

7. What happens if a company fails to appoint an auditor?

The company may face regulatory and corporate governance risks and may encounter difficulties in financing and investment transactions.

8. Are startup companies subject to mandatory audit?

Only if they satisfy applicable thresholds or operate within specially regulated sectors.

9. Can a company voluntarily obtain an independent audit?

Yes. Many companies voluntarily undergo audits to improve credibility and attract investment.

10. Why are independent audits important?

Independent audits improve transparency, strengthen governance, support financing opportunities, and increase investor confidence.

Legal Support for Independent Audit Compliance

Determining whether a company falls within the scope of mandatory independent audit requires careful analysis of financial statements, corporate structure, group company relationships, and applicable sector-specific regulations. Errors in this assessment may expose companies to regulatory and commercial risks.

If your company requires assistance with independent audit obligations, auditor appointments, corporate governance compliance, foreign investment structures, merger and acquisition due diligence, or regulatory compliance matters in Turkey, obtaining experienced legal guidance can help ensure full compliance and reduce business risk.

Working with a qualified corporate lawyer can assist your business in managing audit obligations effectively while supporting long-term growth and investment objectives.

Legal Support and Contact Information

Phone: +90 312 434 22 22

Mobile / WhatsApp: +90 532 769 22 22

Email: info@firatfesihkaya.av.tr

Address: Mevlana Boulevard No:221, Yildirim Tower No:148, 06520 Balgat, Cankaya, Ankara, Turkey

Fırat Fesih Kaya Law Firm provides legal services to foreign investors, multinational corporations, startups, shareholders, financial institutions, and international businesses throughout Turkey in matters involving independent audit compliance, corporate governance, company formation, mergers and acquisitions, regulatory compliance, and commercial law.