TURKEY'S NEW COMMERCIAL CODE TO HAVE BROAD IMPACT ON FINANCIAL REPORTING AND AUDITING: A NEW ERA

Abstract

During more than half a century The Turkish Commercial Code (TCC) has been regulating business life in Turkey. Nevertheless new concepts overarching beyond geographical borders like "information society" and "corporate governance" came to the forefront, and inevitably the legislation that regulates the business life started to become insufficient. Accordingly modifying, updating, and advancing the TCC became a necessity in order to be capable of addressing the contemporary challenges of today's world. The new law was promulgated in the Official Gazette on February 2011. As stated in the New Turkish Commercial Code No. 6102 it has come into effect as of 1 July 2012. Amendments made to the New TCC in June were promulgated in the Official Gazette on 30 June and became effective on 1 July 2012 as well. It constitutes a major reform of Turkish commercial law and thoroughly changes the entire legal framework for the ways in which commerce and investment are carried out in Turkey. Therefore New TCC sets fundamental changes in financial reporting and auditing. The objective of the law is to enable Turkish companies to use financial reporting generally accepted in international markets and enable them to be competitive players in these markets. At the same time the new law introduces a fundamental system change with a reformist understanding and a contemporary evolution in the auditing of companies. These changes make a substantial contribution to establishing trust in national and international markets and creating a new perspective for Turkey. It also increases the sustainable competitive advantage of Turkish enterprises by using an international language and facilitates Turkey's strategic depth in economic politics. In this study evolution of the financial reporting and auditing in Turkey is examined by the perspective of the New TCC.