Our Company Is Subject to Audit under Turkish Commercial Code No. 6102. The Auditor Issued a Disclaimer of Opinion/an Adverse Opinion on Our Financial Statements. What Should We Do?

The fifth paragraph of Article 403, "Opinion Letters", of Turkish Commercial Code No. 6102 provides: "Where an adverse opinion is issued, the board of directors shall convene the general assembly within four business days of receiving the opinion letter, and the general assembly shall elect a new board of directors. Unless the articles of association provide otherwise, the former board members may be re-elected. Within six months, the new board of directors shall have financial statements prepared in accordance with the law, the articles of association and the standards and shall submit them to the general assembly together with the audit report. Where a qualified opinion is issued, the general assembly shall also decide on the necessary measures and corrections."

The fourth paragraph of the same article provides: "Where the company's books contain uncertainties to an extent that does not allow the audit to be carried out and conclusions to be reached in accordance with the provisions of this Section, or where the company imposes significant restrictions on the matters to be audited, the auditor may, stating its reasons, refrain from giving an opinion even if it does not have evidence to prove them. A disclaimer has the consequences of an adverse opinion."

Accordingly, in audits carried out under Turkish Commercial Code No. 6102, if an adverse opinion or a disclaimer of opinion is issued, the board of directors must convene the general assembly within four business days of receiving the opinion letter; the general assembly must elect a new board of directors (unless the articles of association provide otherwise, the former board members may be re-elected); and within six months the new board must have financial statements prepared in accordance with the law, the articles of association and the standards and submit them to the general assembly together with the audit report.