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Independent Audit · May 9, 2022

Can a Signed Audit Engagement Contract Be Terminated? What Should I Do If the Contract Is Terminated?

Audit engagement contracts between audit firms or auditors and the audited company may be terminated if certain conditions are met.

Audit engagement contracts between audit firms/independent auditors undertaking audits and the audited company may be terminated if certain conditions are met.

Under Article 399/8 of Turkish Commercial Code No. 6102, the auditor may terminate the audit contract only for just cause or if an action for its removal has been filed against it. Disagreements about the content of the opinion, a limitation of the audit imposed by the company, or refusal to issue an opinion do not constitute just cause. The auditor's termination must be in writing and state its reasons.

If the contract is terminated, this must be notified in writing to the Public Oversight Authority, together with the reasons, within 10 days under Articles 29/4 and 34/1-(c) of the Independent Audit Regulation.

In addition, under Article 399/8 of Turkish Commercial Code No. 6102, the auditor is obliged to present to the general assembly the results it has obtained up to the termination date; these results must be put into a report in accordance with Article 402 of the Code and submitted to the general assembly.

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