3.4.1. Audit at the Bank

The activities of the Bank, which operates as a joint stock company, are audited by both internal and external auditors in compliance with the regulations of the Bank Law No. 1211.

Audits Conducted by the Internal Organs of the Bank

In accordance with Article 15 of the Bank Law, the General Assembly examines and resolves whether to approve the annual report submitted by the Board of the Bank, the report of the Auditing Committee, the Bank’s balance sheet, and profit and loss accounts. The General Assembly completes the monitoring of the Bank activities every year by clearing the Board of the Bank and the Auditing Committee.

In accordance with Article 24 of the Bank Law, the Auditing Committee supervises all the Bank operations and accounts and submits a report at the end of the year to the General Assembly that draws on the Bank’s operations and accounts. Under the authority of the Bank’s Law, the Auditing Committee has the responsibility to submit its written opinions to the Board and also to present a copy thereof to the Prime Ministry.

According to Articles 49 and 50 of the Regulation on the Organization and Duties of the Bank, the authority of and responsibility for auditing the Bank’s transactions are entrusted with the Audit Department.

The Department has the duty and authority to conduct audits, examinations and research, carry out investigations and offer consulting services when needed in the units, branches and representative offices of the Bank and also at institutions and organizations other than the Bank that fall within the scope of authorities and duties granted by Law No. 1211 as well as other legislations.

The Audit Department is composed of 18 chief inspectors, 6 chief auditors, 10 inspectors, 2 auditors, 3 IT auditors, 9 authorized assistant auditors, 15 assistant auditors and 2 IT assistant auditors. Among those, one chief inspector and one chief auditor are assigned to assist the Head of the Department in the conduct of his duties.

The quality assurance review conducted by external auditors in 2011 certified that the internal audit activities of the Audit Department conform to the International Standards for the Professional Practice of Internal Auditing (Standards) and are parallel with global best practices.

The system of "Follow-up of Audit Results", which was established to monitor whether the necessary actions are taken regarding the issues in the audit reports, to inform and take opinions of the Executive Committee, the Board and the Auditing Committee, was held in May and December of this year.

Audits Conducted by External Auditors

Article 42 of the Bank Law constitutes the legal basis of external auditing of the Bank. Accordingly, the Prime Minister may request an audit of the Bank’s transactions and accounts.

In accordance with Article 42 of the Bank Law, the Governor submits a report to the Council of Ministers on the operations of the Bank and the monetary policy followed and to be followed, each year in April and October. The Bank furnishes information regarding its operations to the Planning and Budget Commission of the Grand National Assembly of Turkey twice a year.

In accordance with the second paragraph of the same Article, the Bank may assign external auditors to audit the Bank’s balance sheet and profit and loss statement. An independent external review of the Bank’s accounts has been deemed as vital to the corporate governance of the Bank, and was first initiated in 2000. As part of the transparency and accountability principles adopted, the reports prepared following the audit engagements each year are made public via the Bank’s website.

In addition to the audits, the Undersecretariat of Treasury, the State Supervisory Commission, the Turkish Court of Accounts, some ministries and other authorized government agencies may, through their auditors, conduct audits at the Bank on subjects related to their duties, if needed.