The Turkish Commercial Code (TTK) has been revised and has gained an effectiveness that addresses all aspects of life with its new version. Especially as a result of the regulations made in commercial life, it has tried to put aside the Commercial Code practices that have existed for decades and include them within the scope of compatibility with the new world order.
When we look at these harmonizations from the company level, it is possible to see that the phenomenon of auditing and the existence of natural auditors occupy an important place.
The cornerstone of the country’s future in terms of purpose and scope is to move away from the environment of registration, fraud and shaming against corruption and informality, and to move forward into the future in true and honest societies.
In this way, protecting the rights and laws of the company’s partners and third parties related to the company, as well as impartial and real truths of a commercial element, constitutes the subject of the audit. The responsibility of the auditor, who is the implementer of such a serious issue, is defined in the Turkish Commercial Code in terms of ensuring the expected result from the audit. introduced important regulations.
In the TCC published in the Official Gazette No. 27846 dated February 14, 2011, there are articles under the headings “liability of auditors arising from keeping secrets (404)”, “liability of the auditor (554)” and, in case the responsibility covers more than one person, “sequentiality and application (557)”. It was included in the form.
If the auditors violate the responsibility of keeping confidentiality in Article 404 of the Turkish Commercial Code, Article 554 will be applied outside of Article 404. Although the liability is based on the principle of fault, the one who claims the fault has to prove it.
It is important not to confuse the responsibility regulated by Article 404 with the responsibility contained in Article 554.
Is the auditor’s responsibility in the TCC more German or Swiss System? As can be seen in the analysis made by “N.Ayşe Odman Boztosun”, it is necessary to revise the areas where these two Articles 404 and Article 554 conflict or may cause confusion. I believe it will be beneficial.
Otherwise, they will have to choose one of the non-liability actions that fall within the scope of two articles against the plaintiff company or its shareholders or the company’s creditors.
If there are conditions, article 557 regarding succession shall be applied.
Going back to the title of the article,
“Secret” refers to the information learned during the audit activity. The condition of liability is the use of the secret. However, it is not necessary for a benefit/benefit to be obtained as a result of use for liability. Using the secret with permission eliminates responsibility.
Accordingly, auditors, their assistants and independent auditing institutions and their representatives are obliged to carry out the audit they are obliged to carry out in an honest and impartial manner and to keep secrets.
They cannot use it without permission, and those who violate their obligations intentionally or by negligence are liable to the company and to affiliated companies if they cause damage.
If there is more than one person causing damage, the liability is joint.
Compensation may be imposed on persons who are negligent in fulfilling this provision, due to the damage they cause, up to one hundred thousand Turkish Liras for each audit, and up to three hundred thousand Turkish Liras for joint stock companies whose shares are traded on the stock exchange. This limitation on persons who cause damage through negligence applies in cases where more than one person has participated in the audit or more than one liability-bearing action has been carried out, as well as if some of the participants have acted deliberately. If the auditor is an independent auditing institution, the responsibility for confidentiality will also include the board of directors, members and employees of this institution.
The compensation obligation arising from these provisions can neither be removed nor reduced by the contract.
Claims regarding the auditor’s liability arising from this article become statute-barred in five years, starting from the date of the report. However, if the act constitutes a crime and the lawsuit is subject to a longer statute of limitations according to the Turkish Penal Code, that statute of limitations is also applied to the compensation lawsuit. The provisions of the criminal legislation regarding crime reporting are reserved.
The responsibilities of auditors, which are organized in a very wide range, and the situations they will face and the penal sanctions they will receive in case of liability gaps are quite heavy and hang over the head of the auditor or auditing organization like the Sword of Damocles.
Therefore, the question that needs to be asked is, can there be an independent auditor against such an aggravated liability trap that the majority is not even aware of?
As even very small-scale companies with very low annual wages will be valued within the scope of trade secrets and/or secrets arising from auditing, it would be beneficial to revise the law of obligations and criminal law, as it is obvious that even the same punishment given to the same crime as other large companies would be unfair.
Where will we find the brave hearts to take the risk when there are so many independent (!) auditors?
Selahattin İPEK
CPA – Independent Auditor