Multiple audit system for cooperatives in Turkish law

Abstract

In the jurisprudential landscape of Turkey, cooperatives occupy a unique po-sition, regulated under the comprehensive purview of the Turkish Commercial Code with delineated prescriptions in the Cooperatives Code. Cooperatives are distinct from commercial entities in that they aim to procure economic advantages through collective solidarity and mutual aid, rather than through profit accrual and distribution. However, this does not exempt them from the rigorous auditing requirements that other com-mercial entities are subject to, necessitating a robust audit framework. The legislative architecture in Turkey has endorsed a multiplex audit regimen for cooperatives, thereby establishing a composite of external, independent, and mandatory internal audits con-ducted by the cooperative’s governing body as the standard practice. This prescriptive embrace of internal audits, divergent from the practices in capital companies, serves to elucidate a strategic safeguard against the potential dilution of accountability mecha-nisms within cooperatives. However, the eclectic and fragmented legal foundation un-derpinning this multifaceted audit system presents analytical challenges, particularly with regard to the redundancy of mandated internal audits in the presence of com-prehensive external and independent evaluations. This raises questions about the prag-matism and proportionality of such regulatory mandates within the cooperative sector. Therefore, the conglomerate audit structure, while demonstrating a commitment to enhanced transparency and fiduciary diligence, requires a critical re-evaluation of its alignment with the operational and existential ethos of cooperatives.