Union of Chambers of Certified Public Accountants of Turkey
Member | Established: 1989 | Member since 1994
TÜRMOB was established in 1989 as a mandatory membership organization for CPAs and Sworn-in CPAs, in accordance with the Professional Law No. 3658 on Certified Public Accountancy and Sworn-in CPA of 1989 (as amended).
Under the Professional Law No. 3658, TÜRMOB is authorized to (i) monitor compliance with initial and continuing professional development requirements for its members; (ii) translate and monitor ethical requirements; and (iii) investigate and discipline members for breach of rules and professional standards. KGK, the audit oversight entity, delegated the authority to conduct quality assurance (QA) reviews of non-public interest entities (PIEs) to TÜRMOB, under its oversight. All other TÜRMOB activities are subject to oversight by the Ministry of Treasury and Finance.
In addition to being a member of IFAC, TÜRMOB is a member of the Federation des Experts Comptables Mediterraneens, Accountancy Europe, and the Edinburgh Group.
Statements of Membership Obligation (SMO)
The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.
SMO 1: Quality Assurance
Statutory Decree No. 660 requires the establishment and operation of a mandatory quality assurance (QA) review systems for all audits in Turkey by the Public Oversight, Accounting and Auditing Standards Authority (KGK). TÜRMOB reports that KGK’s QA system is in line with SMO 1 requirements.
TÜRMOB was delegated the responsibility to conduct QA reviews for auditors of non-public interest entities (PIEs) under the oversight of KGK. TÜRMOB also indicates that it established the system in line with SMO 1 requirements. Inspections are carried out at least every 3 years for audit firms which audit public interest entities, and every 6 years for non-PIEs. Results of inspections performed are announced to the public via an annual report.
Aside from implementing the QA review procedures, TÜRMOB focuses its efforts on supporting members with understanding the processes and requirements through guidance materials. For example, TÜRMOB prepared the Guide on Monitoring Practices, Professional Services and Quality for Accounting, Auditing and Consultancy Practices for members in January 2018.
TÜRMOB reports it assists firms in understanding the objectives of quality control and implementing and maintaining appropriate systems of quality control. In addition to translating guidance material issued by IFAC, TÜRMOB provides its members with training, seminars, and conferences on quality control policies and procedures. There are three regional seminars and conferences on TÜRMOB’s QA review system scheduled to take place in February, May, and October 2020.
TÜRMOB is encouraged to continue collaboration with the Public Oversight, Accounting and Auditing Standards Authority (KGK) to ensure that there are no overlaps between the system established by TÜRMOB and that of the KGK, and to ensure that it complies with the requirements of SMO 1. TURMOB is encouraged to continue monitoring and preparing members for the changes from quality control standards to quality management standards that being proposed and reviewed by the IAASB.
SMO 2: International Education Standards
TÜRMOB shares responsibilities with regulators in the jurisdiction, namely universities, the Turkish Higher Education Council, the Expert Accountants Association of Turkey (EAAT), and the Public Oversight, Accounting and Auditing Standards Authority (KGK), regarding implementation of accountancy education requirements. While some educational requirements are aligned with 2015 IES (namely IES 7 & 8), the extent of alignment with all 2015 IES at the jurisdiction level needs to be clarified.
TÜRMOB is specifically responsible for offering the Certified Public Accountancy (CPA) and Sworn-in CPA designations and setting the IPD requirements. Candidates for the designations must first (i) obtain a bachelor’s level degree or higher in economics, law or management; (ii) complete a series of final exams (8 subjects) administered by TÜRMOB for CPAs, and inspected by the Public Oversight, Accounting and Auditing Standards Authority (KGK) for Sworn-In CPAs; and (iii) complete three years of practical experience before applying for membership. To maintain their membership, individuals must complete continuing professional development (CPD) requirements that are consistent with those specified by revised IES 7 (i.e., 120 hours over a 3-year rolling period).
TÜRMOB supports implementation of education requirements through the provision of various education, examination preparation, and continuing professional development programs and webcasts to its members. The institute updates members of the profession on any changes to its educational policies via the member journal.
As a matter of priority, TÜRMOB is encouraged, possibly in cooperation with other stakeholders involved in the education of professional accountants in the jurisdiction, to review the national requirements against those of the revised IES. In this regard, the Accountancy Education Benchmarking Tool developed by the Center for Financial Reporting Reform of the World Bank may be utilized. Specific actions that are measurable and with a defined timeframe need to be developed to bring accountancy education in the jurisdiction in line with the IES.
The revised (2015) IES emphasize the need for professional accountants to demonstrate competencies to carry out their roles and responsibilities throughout their initial professional development programs. It is not clear from the available information if the IPD requirements align with the IES requirements. Further, in 2019, newly revised IES address learning and development for information and communications technologies (ICT) and professional skepticism. As market expectation increases for ICT skills and professional skepticism, these standards were developed to address the competencies, skills, and behaviors for both aspiring and professional accountants in these critical areas. These revised standards become effective January 2021.
SMO 3: International Standards on Auditing
The Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Statutory Decree No. 660 states that auditing and assurance standards are issued by the KGK under the title of Turkish Auditing Standards (TDSs). According to the Law of Accountancy Profession Numbered 3568, TÜRMOB has authority to communicate both the TDSs and ISA to professional accountants.
KGK has published national standards complying with ISAs issued by IAASB with small amendments to take into consideration the Turkish environment. The 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements is the latest version adopted by KGK.
To raise awareness of the standards, the TÜRMOB collaborates with academics to prepare and publish articles on ISA and related topics and disseminate new and revised IAASB pronouncements.
TÜRMOB also reports to support implementation of the standards through the education program that its Education and Training Center offers. The Center periodically updates the initial professional development and continuing professional development curricula to incorporate the latest requirements of ISA. Lastly, TÜRMOB reports to obtain comments from technical experts to comment on IAASB exposure drafts.
The 2018 Handbook is now effective, which includes revised standards ISA 250 and 540. TÜRMOB is encouraged to reduce the time lag in the translation of the Handbook. It should develop a plan with a specific timeline for the translation of the Handbook and to raise awareness of its requirements. It is recommended that TÜRMOB also consider enhancing its activities through additional targeted seminars, sessions that focus on key challenges with regards to implementation, and discussion of tools and technology to facilitate ISA implementation to support its members with the implementation of the latest standards.
SMO 4: Code of Ethics for Professional Accountants
The Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Statutory Decree No. 660 provides general authority to the Public Oversight, Accounting and Auditing Standards Authority (KGK) to issue ethical standards in compliance with international standards for auditors. The KGK presently adherence to the 2018 International Code of Ethics. Additionally, specific authority for the issuance of a Code of Ethics for other professional accountants is vested in TÜRMOB. TÜRMOB has also adopted the 2018 International Code of Ethics.
TURMOB is presently working on translation of the 2018 International Code of Ethics to further application of the ethical requirements. TÜRMOB reports it raises members’ awareness of the IESBA Code of Ethics by (i) publishing articles on ethics in TÜRMOB publications; (ii) designing and delivering training events, such as an annual Ethics Congress; and (iii) updating the education, examination, and training curricula to incorporate revisions to the IESBA Code of Ethics. TÜRMOB also supports member participation in the international standard-setting process by soliciting comments on IESBA Exposure Drafts.
TÜRMOB is encouraged to reduce the time lag in the translation of the IESBA Code. Considering the June 2019 effective date of the 2018 International Code of Ethics, a completely restructured and rewritten Code that includes the important NOCLAR standard issued in 2016, TÜRMOB is encouraged to develop a plan with a specific timeline for the translation of the Code and to raise awareness of its requirements. It is recommended that TÜRMOB also consider enhancing its activities to support its members with the implementation of the Code. Such activities may include establishing a hotline for confidential questions and disseminating information on the developments in the area through different communications means, among other activities. Further, TURMOB is requested to clarify its collaboration and work with the KGK in translating the Code so that all professional accountants in Turkey have access to and are applying the same principles.
SMO 5: International Public Sector Accounting Standards
The Public Financial Management and Control (PFMC) Law of 2006 requires the Government of Turkey to adopt international accounting standards in the public sector. Public Accounting Standards Board of Turkey (DMSK) is the entity responsible for overseeing this work. TÜRMOB reports that, since 2003, the Central Government has been implementing a modified accrual-basis of accounting (IFAC, CIPFA) and is working to converge its standards with IPSAS. In 2019, the Public Accounting Standards Board of Turkey (DMSK) issued 30 Government Accounting Standards based on IPSAS standards and plans to issue 8 additional Government Accounting Standards in 2020.
While TÜRMOB has no direct authority for the adoption of public sector standards in Turkey, it reports to support the convergence process by participating in the DMSK’s work program committee and encouraging the regulator to submit comments on Exposure Drafts issued by IPSASB. Additionally, it has been working to encourage relevant authorities to maintain an ongoing process to translate the most recent version of IPSAS into Turkish in accordance with IFAC Translation Policy as part of the DMSK standards setting process.
TÜRMOB is encouraged to monitor international developments in this area and disseminate IPSAS amongst its members through its magazines, websites, and publications. It is also encouraged to include IPSAS-related material in its training and educational activities for members who work in the public sector. Furthermore, TURMOB is encouraged to consider additional events to promote adoption and implementation of IPSAS including organizing roundtables to meet key stakeholders and users of financial information; and continuing to provide trainings and technical expertise.
SMO 6: Investigation and Discipline
The Union of Chambers of Certified Public Accountants Turkey (TÜRMOB) shares responsibility for investigation & discipline (I&D) procedures in the jurisdiction. It reports that its I&D system embodies the major requirements of SMO 6 requirements.
TÜRMOB reports that it provides members and the public with workshops to raise their awareness of I&D procedures. Between 2011-2017, six I&D workshops were offered to members, and a seventh is planned for 2020.
The association works to ensure that members of the profession are kept informed of the consequences of non-compliance or misconduct under the I&D system via its professional magazine and by posting the Rules on Disciplinary Procedures on its website. TÜRMOB also informs the public about its members’ obligations and any decisions involving expulsions from its membership.
TÜRMOB is encouraged to continue to raise awareness of other stakeholders involved in the I&D of professional accountants to bring the overall I&D system in the jurisdiction in line with the international best practices. During the next round of update, TÜRMOB is requested to build upon the self-assessment checklist included in the SMO Action Plan and conduct an in-depth assessment of the overall I&D system in the jurisdiction as well as the plan to address the gaps, if any. Additionally, TURMOB is requested to work with KGK to determine what, if any, actions may be taken to coordinate efforts at investigation and discipline. Finally, TURMOB is requested to consider how and in what way it may be able to include non-professionals as part of its I&D program.
SMO 7: International Financial Reporting Standards
The Public Oversight, Accounting and Auditing Standards Authority (KGK), which was established in accordance with the Public Oversight, Accounting and Auditing Standards Authority’s Organization and Responsibilities Statutory Decree No. 660, is responsible for setting corporate accounting standards in Turkey.
KGK requires the application of Turkish Financial Reporting Standards (TFRS) which are fully converged with IFRS as issued by IASB for the financial statements of all public interest entities (PIEs). PIEs include companies whose securities are traded in a regulated market, banks, insurance companies, pension companies, and investment firms.
Other companies that are not included in the list above are permitted to apply IFRS or the Financial Reporting Standard for Large and Medium Sized entities (BOBI FRS) established by the KGK. BOBI FRS is the financial reporting framework for entities, which are not required to apply TFRS but are within the scope of entities subject to audit. Differences between BOBI FRS and IFRS for small and medium-sized entities (SMEs) are outlined here. While IFRS for SMEs was previously permitted in the country, it is not permitted at this time. However, the 2009 version has been translated into Turkish and was made available.
TÜRMOB does not have authority for the adoption of IFRS but it does have an active role in the implementation process. TÜRMOB is involved in the process of translating IFRS in accordance with the IFRS Foundation Translation Policy. It also participates in the international standard-setting process by providing comments on Exposure Drafts issued by the IASB.
TÜRMOB supports its members with the application of accounting standards by updating the education (IPD), examination, and training (CPD) curricula to incorporate new and revised Turkish Financial Reporting Standards. The TÜRMOB also notes it collaborates with academics to host events and publish articles and other material on the TFRS in TÜRMOB publications and on its website.
TÜRMOB is encouraged to continue to raise awareness of IFRS and emerging issues on adoption and implementation in the country. Additionally, TÜRMOB is encouraged to continue its strong efforts at education, training, and support to members in the application of the standards in practice. Finally, TURMOB is requested to consider to what degree promoting of IFRS for SMEs may be useful to the SME financial reporting environment in its country.
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