DRAFT REGULATION ON SUSTAINABILITY AUDIT IS SUBMITTED TO PUBLIC’S VIEW

The Draft Regulation on Sustainability Audit (“Draft Regulation”), which will regulate (i) the sustainability audit to be conducted mainly within the framework of the Turkish Commercial Code No. 6102, the Decree Law No. 660 on the Organization and Duties of the Public Oversight, Accounting and Auditing Standards Authority (“Authority”) or on a voluntary basis, (ii) the authorization and responsibilities of independent audit firms and independent auditors who will operate in the field of sustainability, (iii) supervision and audit by the Authority  and (iv) the administrative sanctions to be with respect thereto, is submitted to public’s view.

The execution of the Regulation, which will enter into force as of the date of its publication in the Official Gazette, will be monitored by the chairman of the Authority.

Purpose:
The sustainability audit is conducted to form an opinion that will provide assurance to users within the scope of Turkish Audit Standards (“TDS”) as to whether the matters subject to audit are in compliance with a predetermined criterion and the audit will involve the following:

• obtaining sufficient appropriate audit evidence about the subject matter of the audit in accordance with TDS by adhering to professional ethical principles and maintaining professional scepticism;
• forming an opinion based on that evidence; and
• reporting the opinion.

Criterion:

In the sustainability audit, the above-mentioned predetermined criterion will be taken as basis for assessing the compliance of the audit matter which shall be Turkish Sustainability Reporting Standards (TSRS) and other related regulations. In matters where the criteria are not determined, the Authority will make the decision.

Authorised Firms:

Sustainability audits will be conducted by audit firms authorized by the Authority in the field of sustainability.

For authorization,

(i)     An audit firm shall

• be an active independent audit firm registered in the Official Register of Independent Auditors,
• have at least two responsible auditors having qualifications set forth under the Draft Regulation,
• have audit staff of sufficient quality and breadth to form minimum audit teams, and
• have established sustainability audit guidelines.

(ii)     An auditor shall

• be registered in the Independent Auditor Official Registry and be an active independent auditor,
• be successful in the exam subjects related to the field of sustainability, and
• have completed applied vocational training.

Both independent audit firms and auditors fulfilling the above conditions shall be granted with a certificate of authorization upon the approval of and registration with the Authority.

Reporting and Liability:

Pursuant to the Draft Regulation, the report issued upon the sustainability audit shall be prepared in accordance with the TDS and signed by the responsible auditor who has at least 3 years of audit experience in the field of sustainability and the report will be submitted to the management body of the audited entity.

Audit firms and auditors are legally liable for any damages that may arise due to non-compliance with the TDS and any incorrect, incomplete and misleading information and opinions in their reports.

The Authority is entitled to inspect the sustainability audit activities of the audit firms within the framework of selected audit files, other information, notifications and documents and announce the results of its examinations to the public annually. If a violation is detected during these inspections and/or through complaints or denunciations, the Authority has the right to impose sanctions on the audit organization and the auditor, such as giving a warning, restriction of an activity, suspension of the activity permit or revocation of the activity permit.