Audit

Independent Audit

Independent audit is a mandatory type of audit required not only by regulations of the Capital Markets Board and the Public Oversight, Accounting and Auditing Standards Authority (KGK) but also due to other commercial relationships, such as financing obtained from international credit institutions or the presence of foreign partners. This audit ensures that financial statements presented to domestic and international partners, credit institutions, and for consolidation purposes abroad are prepared in accordance with international financial reporting standards (IFRS) and provides reasonable assurance on the accuracy of the presented statements.

Purpose and Importance

The primary purpose of an independent audit is to provide stakeholders with an unbiased and professional opinion on the accuracy and reliability of a company's financial statements. This is crucial for maintaining trust and transparency with shareholders, investors, financial institutions, and other stakeholders. It helps in identifying potential financial discrepancies and ensures compliance with all applicable financial regulations and standards.

Scope of Independent Audit

1. Compliance with International Standards:

   • Ensuring that financial statements comply with IFRS and other relevant international standards.
   • Verification that all financial reporting is accurate and transparent.

2. Risk Management and Internal Controls:

   • Assessing the effectiveness of a company’s internal controls and risk management processes.
   • Identifying areas where improvements can be made to strengthen financial reporting.

3. Financial Health and Performance:

   • Evaluating the overall financial health of the company.
   • Providing insights into financial performance and areas for potential improvement.

4. Assurance to Stakeholders:

   • Offering reassurance to stakeholders about the company's financial integrity.
   • Enhancing the company’s credibility and reputation in the market.

Process of Independent Audit

1. Planning and Risk Assessment:

   • Understanding the client’s business, industry, and environment.
   • Identifying key areas of risk and planning the audit approach accordingly.

2. Testing and Evaluation:

   • Conducting detailed testing of financial transactions and balances.
   • Evaluating the effectiveness of internal controls and risk management practices.

3. Reporting:

   • Preparing an audit report that provides a clear and concise opinion on the financial statements.
   • Highlighting any areas of concern or recommendations for improvement.

Regulatory Compliance

In Turkey, independent audits that fall under the scope of the Public Oversight, Accounting and Auditing Standards Authority (KGK) must be conducted by audit firms authorized by KGK. This ensures that the audit is performed by professionals who meet stringent regulatory standards and possess the necessary expertise and experience.