Abstract:

Purpose- This paper intends to examine how a firm must be audited when filed a case for debt restructuring in order to protect the creditors, save the firm creating economic value and provide an assurance for the reports of auditing firms. Methodology- Bankruptcy, debt restructuring and audit process for the particular period are examined Findings- There are limited number of firms in Turkey subject to external audit. Due to economic crises, expected movements in exchange rates and insufficient amount of equity sources, firms are forced to obtain loans form financial institutions. Later, these firms mosly demand debt restructuring to gain time to pay their loans over a longer period. It is viewed that most firms filed a debt restructuring has failed to obtain an extented period from the court. Conclusion- Reporting audited financial statements in compliance with the standards of accounting and auditing will partially secure the companies to turn around the debt restructuring. In order to save the firms that filed a debt resturcturing, all firms should be external audited and a new regulation for writing checks should be worked on.