3.6.1. Audit at the Bank

The Bank operates as a joint stock company. The Bank’s activities 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 activities of the Bank 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 operations and accounts of the Bank and submits a report to be drawn upon operations and accounts of the Bank at the end of the year to the General Assembly. 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 44 and 45 of the Main Regulation on Organization and Duties of the Bank, the authority of and responsibility for auditing the Bank’s transactions are entrusted to 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 the Law No. 1211 as well as other legislations.

The Audit Department is composed of 18 chief inspectors, 6 chief auditors, 20 inspectors, 1 auditor, 3 IT auditors, 15 assistant auditors and 2 IT assistant auditors. Among those, one chief inspector and one IT auditor are assigned to assist the Executive Director in the conduct of his duties.

Being one of the leading institutions in the country that has “Internal Audit Quality Assurance Assessment”, which is accepted as an indicator of the importance given to the execution of the internal audit activity within the framework of international standards, the Bank was given the “Internal Audit Awareness” award by the Institute of Internal Auditors of Turkey at a ceremony held on 29 May 2012.

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 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 balance sheet and profit and loss statement of the Bank. An independent external review of the Bank’s accounts has been deemed 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 these audits, the Undersecretariat of the Treasury, the State Supervisory Commission, the Turkish Court of Accounts, some ministries and other authorized government agencies may conduct audits through their auditors in the Bank on the subjects related to their duties, if needed.