New Developments
Pursuant to the Board Decision (“Decision“) of the Public Oversight, Accounting and Auditing Standards Authority (“POA”) on determining the scope of application of the Turkish Sustainability Reporting Standards (“TSRS”), certain entities became subject to sustainability reporting obligation from 1 January 2024. You can access our client alert dated 15 January 2024 regarding the Decision here.
In addition to the Decision, the Regulation on Sustainability Audit (“Regulation“), which regulates the audit of mandatory sustainability reporting and the duties and responsibilities of the auditors, was published in the Official Gazette of the Republic of Türkiye dated 17 January 2025 and entered into force on the same date. However, there was uncertainty in practice as to whether the selection of the auditor for the sustainability report was subject to the general assembly’s approval.
With the POA’s announcement dated 25 June 2025 (“Announcement“), the selection of sustainability auditor and the presentation of sustainability reports are now clarified.
What Does the Announcement Say?
With the Announcement, POA clarified the implementation of the Decision and the Regulation on the following topic:
– The sustainability auditor will be selected and the audited sustainability reports will be presented to the general assembly in the same way as the financial statements auditor is selected and these statements are presented to the general assembly.
The Regulation stipulates that sustainability audit reports must be submitted to the management body of the audited entity at least 20 days before the ordinary general assembly meeting for the accounting period to which the audited financial statements relate, and, in any case, within three months from the end of each accounting period.
– Transition.
Since sustainability reporting is a new practice and the legislation is still developing, it is deemed sufficient for the board of directors to select the auditors who will undertake the assurance audit of the TSRS-compliant sustainability reports for the 2024 and 2025 operating periods to be submitted for approval at the first ordinary general assembly meeting.
In addition, it would suffice if the sustainability report in respect of the financial year 2024 is submitted to the ordinary general assembly for the financial year 2025.
