What Is KGK and How Does It Affect Company Reporting and Audits?

The short answer to the question what is KGK: KGK, the Public Oversight, Accounting and Auditing Standards Authority (Kamu Gözetimi, Muhasebe ve Denetim Standartları Kurumu), is the administratively autonomous public authority in Turkey that sets accounting and auditing standards, licenses independent auditors and oversees their work. It was established by Decree-Law No. 660 and is headquartered in Ankara. Companies rarely correspond with KGK directly, but the standards it issues determine how financial statements are prepared, and its oversight determines how your auditor works.

In this article we explain the authority’s structure, its five core duties and how these duties are reflected in a company’s annual calendar. The audit itself and reporting frameworks are covered in separate articles; here our focus is the regulator itself.

What is KGK and how is it structured?

KGK is a regulatory authority with public legal personality and administrative autonomy. Its legal basis is Decree-Law No. 660 dated September 26, 2011, published in Official Gazette No. 28103 dated November 2, 2011. The first article of the decree sets out the authority’s purpose clearly: to establish accounting standards in line with international standards, to ensure quality in independent audit and to carry out public oversight in this field.

The abbreviation is sometimes confusing. Officially named the “Public Oversight, Accounting and Auditing Standards Authority”, it is commonly referred to as the public oversight authority or simply KGK. The full name is used in official correspondence and in the texts of the standards.

How do the Board and the Presidency work?

The authority has two parts: the Board, which is the decision-making body, and the Presidency, which implements the decisions. Under Article 4 of Decree-Law No. 660, as restated in 2025 by Law No. 7549, the Board consists of nine members appointed by the President, one of whom is the Chair and one the Deputy Chair. The Board meets at least once every two weeks, convenes with at least six members and takes decisions with the concurring votes of at least five members.

Strict restrictions apply to members to protect independence. An appointee must not have performed independent audit work or held a partnership in an audit firm in the last three years. Board members also may not take positions in private entities in the field regulated by the authority for two years after leaving office.

The authority’s official description is short and clear. According to KGK’s vision and mission page, the authority’s vision is to create a high-quality and reliable financial reporting and independent audit environment.

What are KGK’s 5 core duties?

Article 9 of Decree-Law No. 660 lists the Board’s duties at length. From a company’s perspective, the list can be grouped under five main headings: accounting standards, auditing standards, licensing, oversight and sanctions, and sustainability reporting.

1. Issuing the Turkish Accounting Standards

KGK establishes and issues Turkish Accounting Standards aligned with international standards so that the financial statements of those required to keep books are transparent, reliable and comparable. The power to issue different sets for different business sizes is also part of this duty. Which set each company should apply is discussed in our What Is TFRS .

2. Setting the Turkish Auditing Standards

The authority also sets national auditing standards aligned with international standards, including information systems auditing. What evidence the auditor collects and how, and in what form the report is written, depend on these standards. As a result, a company’s audit report is prepared under the same rules regardless of which audit firm signs it.

3. Licensing and registering auditors

Professionals and audit firms performing independent audits may work only with KGK’s authorization. The authority enters the persons and firms it licenses into an official register and keeps this list publicly available on its website. This means a company can check the authorization of the auditor it selects by itself.

According to KGK’s 2025 Annual Activity Report, as of December 31, 2025, 168 of the 433 independent audit firms actively registered were also authorized to audit public interest entities (KAYİK). Under Article 23 of Decree-Law No. 660, the audit of PIEs such as banks, insurance companies or listed companies may be performed only by independent audit firms.

4. Oversight, inspection and sanctions

KGK oversees and inspects whether auditors’ work complies with the standards. Under Article 25 of the Decree-Law, quality assurance inspections are conducted at least once every three years for firms auditing PIEs and at least once every six years for others. As a result of an inspection, sanctions such as a caution, a warning, restriction of activity, or suspension or revocation of the operating license may be applied.

The figures show the scale of oversight. According to KGK’s 2025 Annual Activity Report, the authority conducted 101 independent audit inspections in 2025; as part of its oversight, 30,016 audit engagements and 30,317 audit reports were reviewed. According to the same report, the operating licenses of 9 audit firms that issued reasonable assurance reports for concordat (court-approved restructuring) without obtaining any evidence were revoked.

5. Issuing sustainability standards

With a subparagraph added to the Decree-Law by Law No. 7420 in 2022, KGK also took on the duty of setting the Turkish Sustainability Standards and licensing those who will perform assurance in this field. Using this power, the authority issued the international IFRS S1 and IFRS S2 standards as TSRS 1 and TSRS 2. According to the activity report, 458 entities reported their sustainability reports to the authority in the first mandatory reporting period.

How does the public oversight authority affect your company?

KGK mostly deals with auditors, but its decisions reach the company’s desk indirectly. The table below summarizes which concrete obligation each of the authority’s duties translates into for a company:

KGK monitors the obligation to have an audit

Whether a company is subject to audit is determined by a Presidential Decree, but monitoring of this obligation rests with KGK. According to the 2025 Annual Activity Report, the authority reported to the Ministry of Trade the companies that were subject to audit for the 2024 fiscal period but did not meet the obligation. For the 2025 period, it sent letters to companies that had not reported an audit engagement, explaining that an audit is mandatory and the legal consequences of not having one.

There is a practical convenience here as well. KGK publishes the companies it considers subject to audit on its website in a form searchable by tax identification number. Checking whether your company is on the list at the start of the period is the easiest way to avoid being surprised by a letter mid-year. We explained the scope criteria themselves, with their framework, in our what is an independent audit article.

Your financial statements may also be reviewed

KGK may oversee not only the auditor but, when it deems necessary, the audited company’s financial statements as well; this power was added to subparagraph (n) of Article 9 of the Decree-Law in 2022. According to the activity report, the authority sent information letters to 13 entities in which its reviews identified departures from the reporting framework. Explanations were also requested from 189 entities for the 2024 fiscal period due to inconsistencies in applying inflation accounting.

This has an important consequence for company management. A clean audit report does not mean that the financial statements will not be questioned in a later review. Keeping the rationale for accounting policies on file makes it possible to respond quickly to a potential query.

What does the Public Oversight, Accounting and Auditing Standards Authority do that differs from an audit?

The Public Oversight, Accounting and Auditing Standards Authority is not the body that audits a company’s books; it is the body that oversees the auditor’s work. The relationship between the company and the auditor is contractual, while KGK checks whether that relationship is conducted in line with the standards. Nor does it determine the tax base as a tax inspection does; that power rests with the tax administration.

This distinction also has a monetary side. According to KGK’s 2025 Annual Activity Report, administrative fines imposed by the authority in 2025 totaled 97,241,492 TL, equal to about 24% of its actual expenditure budget. Fines are mainly imposed on audit firms and auditors, which shows that the authority’s main focus is audit quality.

Let us also correct a belief we often hear in practice: “KGK will come to audit our company.” As a rule, it will not. However, when the auditor’s working papers are reviewed, your company’s file may also be examined; so the order of the documents you give the auditor is, indirectly, an order that KGK may also see.

Why should you follow KGK announcements?

The KGK announcements page is where changes to standards, Board decisions and effective dates first appear. For example, the authority’s homepage announced that the text amending the procedures and principles of the Presidential Decree on the Determination of Companies Subject to Independent Audit was published in the Official Gazette in May 2026. Decisions of this kind that change scope, deadlines or format directly affect the company calendar.

There is a practical way to keep up. For most companies, a routine in which the finance team reviews KGK announcements and Board decisions once a month, and rechecks the reporting framework the company applies once a year, is sufficient. In companies with foreign shareholders, sharing this information with the parent company’s finance team reduces surprises in the group reporting calendar.

Does the KGK independent auditor exam concern companies?

The KGK independent auditor exam is intended for professionals who want to perform independent audits; companies do not take this exam. Article 9 of Decree-Law No. 660 assigns the authority the duty of setting the rules on examination, licensing, registration, continuing education and professional ethics. For a company, the exam matters indirectly: your auditor’s authorization passes through this exam and licensing chain.

The authority has recently opened a new professional field as well. KGK introduced the title of Corporate Sustainability Reporting Specialist (KSRU) for professionals who will prepare sustainability reports; the first exam was held on December 14, 2025. For a company within the scope of TSRS, this is becoming a way to document the competence of the team preparing the report.

Why should companies with foreign shareholders know about KGK?

A parent company abroad may ask which authority oversees the auditor of its Turkish subsidiary. According to the activity report, the European Commission has recognized Turkey’s public oversight, quality assurance, inspection and sanctions systems as equivalent to those of EU member states as of August 1, 2016; Switzerland made the same decision in 2017, and the United Kingdom confirmed that equivalence continues after Brexit. These decisions allow Turkish audit reports, particularly of companies whose securities are traded in these markets, to be accepted there.

For example, consider a German investor setting up a joint stock company (A.Ş.) in Turkey. Before using the local audit report in consolidation, the parent company’s auditor asks about the local auditor’s authorization and oversight framework. The auditor’s registration in the KGK register and the standards issued by the authority make it possible to answer this question with documents.

We have gathered the steps of the investment process other than reporting and audit in our investment guide category.

How should you prepare for KGK regulations?

Compliance with KGK regulations is planned at the start of the fiscal period, not in audit week. First you need to clarify whether the company is subject to audit and to TSRS, then choose the accounting framework to apply and engage an authorized auditor in time. Appointing someone responsible for following announcements is also part of this plan.

At Akal CPA, as part of our independent audit services help companies plan an audit process that complies with KGK standards. For companies whose accounting we handle, independence rules mean we work not as the auditor but on preparing for the audit and for potential KGK queries.

Last updated: 17.10.2026