There is no unlawfulness in the matter of the lawsuit regarding the removal of the independent audit firm from the list of authorized institutions for independent auditing in case there are practices that could negatively affect the quality of independent auditing and hinder its validity.

By the decision of the Thirteenth Chamber of the Council of State, with the file number 2010/1779 E. and decision number 2017/1246 K. dated 28.04.2017:

During the examination carried out within the scope of the findings transmitted by the Partnership Financing Department to the Accounting Standards Department based on the examination of the working files related to the audit of the financial statements for the 2006 fiscal year of … Tourism Inc., and … Thermal Springs Inc. for 2007, as well as … Food Industry and Trade Inc. for the 2005 fiscal year:

∙ It was observed that although documents were created for the planning of the audit work in the audit files, there was not sufficient information and/or documentation in the audit file indicating that the planned audit activities (such as the examination of the internal control system, determination of audit risk, and materiality threshold) were carried out.

∙ It was noted that the independent audit program and/or working papers lacked information on the names, surnames, signatures/initials of the audit elements performing the audit, controlling the work, overseeing and coordinating, hence, it was not concluded that the supervision and coordination activity in the independent audit was carried out through team work.

∙ It was determined that in the audit of … Inc., the audit was conducted using the general independent audit program of the Institution without taking into account the financial reporting standard set to which the Organization was subject; a significant portion of the standard forms prepared as working papers were left blank, and there were no details of the audited company, audit period, audit elements overseeing and coordinating the work, names-surnames-signatures/initials, and date information of the audit.

∙ There was no information available regarding the applied audit techniques, the obtained audit evidence, and the reached conclusions.

∙ During the examination conducted to determine whether sufficient and appropriate audit evidence was obtained by using necessary audit techniques in independent audit work, it was found that there was insufficient information and documentation in the audit files regarding the applied audit techniques and the obtained audit evidence due to the inadequacy of the document and record arrangement of the Organization, which is significant for proving the conducted work; thus, the inadequacy of the document and record arrangement led to the conclusion that the conducted work was inadequate.

∙ The fundamental elements of independent audit reports, namely ‘management’s responsibility for financial statements’ and ‘responsibility of the independent auditor,’ were not included.

Within the context of the explanations mentioned above and in accordance with the paragraphs b/3 and b/4 of Article 30 of Part 2 of the Capital Markets Board’s Communique No: X on Independent Audit Standards in the Capital Markets, it was decided to remove the institution from the list of authorized institutions for independent auditing in the capital market due to practices that could negatively affect the quality of independent auditing and hinder its validity. In this regard, it was concluded upon the evaluation of all information and documents in the case file together with the mentioned report that there was no unlawfulness in the procedure subject to the lawsuit for the removal of the company from the list of authorized institutions for independent auditing in the capital market.