Comparative analysis of transition process from accounting system application to Turkey Accounting and Financial Reporting Standards

The development of countries' accounting systems in the world are affected by culture, international relations, economic system etc. factors. In addition, globalization movements around the world lead to the harmonization of countries' accounting standards. Because companies can access international funding sources only if they are able to present their financial statements, which can be understood and comparable all around the world and independently audited. Standard harmonization studies made by organizations such as the IASB (International Accounting Standards Board) and the EU (European Union) for this purpose are called harmonization of accounting standards. The work of harmonization of accounting standards in the world has also affected Turkey. As a result of the work done, TMS/TFRS which were entered into force in accordance with IAS / IFRS, has started to be used for independent audit of companies traded on the Stock Exchange. With the inclusion of SMEs in the scope of independent audit, the application of TMS / TFRS by SMEs has come to the agenda. Initially, "IFRS for SMEs" published by the IASB for this purpose was translated into Turkish and published under the name of KOBİ TFRS. However, there has been needed to set a new standard since KOBİ TFRS is burdensome for SMEs, and it is incompatible with both local legislation and legislation of EU with which Turkey has continued for membership negotiation. For this purpose, after being entered into force of TTK No. 6102 dated 2013, in which SMEs are included in the scope of independent audit, a study called "Local Financial Reporting Framework" has been initiated. Until new standard sets have been into force, companies, which are outside the scope of TMS, are going to continue to be subject to MSUGT. The implementation of MSUGT as a basis for independent auditing was abolished when the standard set, whose draft was published with the name of Local Financial Reporting Framework (YFRÇ), was entered into force with the name of Financial Reporting Standards for Large and Medium Size Enterprises (BOBİ FRS) in 2017. In this study, parallel to the development of accounting and independent auditing, the changes of the main legislation for independent audit practice in Turkey is discussed, comparisons are made between the current accounting legislation,by the year 2017 in Turkey, TMS / TFRS, BOBİ FRS and MSUGT (for those not subject to independent verification. However, since MSUGTs cannot be implemented independently of the VUK, VUK is also included in the comparison. In conclusion, it has been understood that the most influential factor for the development of accounting in Turkey is international relations, and compared to the world, the independent audit practices have started too late in parallel with capital markets. It is also seen that TMS / TFRS differ greatly from the local regulation MSUGT-VUK. It has been understood that the cost-based methods which are easy for practitioners from the alternatives in TMS / TFRS have been selected more and also the conformity with MSUGT-VUK has been taken into consideration in the construction of BOBİ FRS. It is also seen that, in principle, BOBİ FRS is prepared as "principle-based" such as TMS / TFRS, but in some areas, rules like MSUGT-VUK are determined.