ISH602 CHAPTER 4 TYPES OF AUDIT

ISH602
HALAL AUDITING

CHAPTER 4
TYPES OF AUDIT

Prepared by:-
Nur Hafizah binti Harun
Academy of Contemporary Islamic Studies

UiTM Shah Alam

TOPIC OUTLINE

CHAPTER 4 TYPES OF AUDIT

4.1 Classification of Audits
4.1.1 Classification on the basis of organization
4.1.2 Classification on the basis of audit dimension
4.1.3 Classification of audits
a. Internal audit – Follow-up audit
b. External audit

4.2 Types of Certification Audits
4.2.1 Adequacy audit
4.2.2 Compliance audit / or Certification audit
4.2.3 Surveillance audits
4.2.4 Change to Approval (CTA)
4.2.5 Re-certification audit

INTERNAL HALAL AUDIT (IHA)

• Also known as first party audit.
• A process audit performed within an organization by internal Halal

auditors.
• Internal Halal Auditing began with a proper planning and

preparation.
• It includes Adequacy, Compliance / On-Site and Follow – Up Audits.
• Need to identify the objective and the scope of audit.

OBJECTIVES OF
INTERNAL HALAL AUDITING (IHA)

OBJECTIVES OF IHA

To verify the To confirm that the To comment on the To facilitate the
correctness, Non-Conformances efficiency of the early detection and
accuracy and Record (NCR) has Halal internal prevention of Halal
authenticity of the
Halal policies, occurred in the control system and risk.
procedure and organization in to suggest ways and
execution and respect of its valid means to improve
presented it to the and legitimate
management these systems
activities

OBJECTIVES OF IHA

To identify the To ensure that the To assist management in
authorities responsible standard Halal practices achieving the most

for NCR which have to be efficient administration
followed by the of the operation by
organization strictly
establishing procedures
adhere. that complies with
company’s operating
policies

BENEFITS OF INTERNAL HALAL
AUDIT

BENEFITS OF IHA

1. Identify actual or potential risks and gives input for management
decisions.

2. Develop confidence in the organizations’ system by establishing a
regular schedule of internal audits and training staff to carry them.

3. Increase the general level of halal awareness among all the staff by
the ongoing process of auditing.

4. Identify areas for improvements.

AUDIT TEAM

INTRODUCTION

• The company shall have a process for selecting the appointing the
audit team, including the audit team leader, taking into account
competency needed to achieve the objectives of the audit.

• If there is only one auditor, the auditor shall have the competence
to perform the duties of an audit team leader applicable for the
audit.

AUDIT TEAM

An effective audit team usually consists of 2 or more members. The
requirements for an auditor are:-
• Practising Muslim – A Muslim by birth doesn’t ensure that the said

person is a practising Muslim.
• Non-Muslim can be an auditor, but the lead auditor must be Muslim.

Need to be trained on the principles of Halal and knew the technical
aspect of the auditing and production process.

RESPONSIBILITIES OF
HALAL LEAD AUDITOR

• Lead auditor plays a vital role in determining the pace of the auditing
process.

• Functions as a leader of the audit team.

• Must organize the audit process.

• Make final decisions regarding the outcome of the audit.

CRITERIA OF HALAL LEAD AUDITOR

Muslim Competent with Has conducted and
Shariah knowledge participated at least
and Halal principles two internal Halal

audits

Has been trained in Pose necessary skills *Technically
the auditing process competent in the
relevant specific field

*should have a minimum of TWO (2) years full-time working experience in food technology /
food science, veterinary science or relevant areas

CRITERIA OF HALAL AUDITOR

Qualified and trained in the audit process

Able to recognized Halal, safety and quality criteria

Knowledgeable in Halal codes of practice, legal requirements, industry
guidelines and standards

Able to identify and assess potential non Halal issues

CRITERIA OF HALAL AUDITOR

Familiar and knowledgeable about Halal audit, regulations,
procedures, requirements and certification procedures

Have a combination of qualifications and experience necessary to
enable him/her function effectively

Have the ability to present audit findings / summary in writing in an
objective way and to write formal audit reports.

PERSONAL ATTRIBUTES

Ethical Open minded Diplomatic Observant

Versatile Tenacious Decisive Self-Reliant

Punctual Communicator Patient Firm and fair

PERSONAL ATTRIBUTES

• Report exactly what they have discovered during an audit without fear or favour
Ethical • An obligation to the organization and auditee when conducting an audit

• Willing to consider alternative ideas or points of view

Open
minded

• Auditors are tactfully in dealing with people and have ability to deal successfully
Diplomatic with all kinds of people

PERSONAL ATTRIBUTES

• Actively aware of physical surroundings and activities

Observant

• Willing to consider alternative ideas or points of view

Versatile

• Persistent, focused and achieving objectives

Tenacious

PERSONAL ATTRIBUTES

• Reaches timely conclusions based on logical reasoning and analysis

Decisive

• Acts and functions independently while interacting effectively with
Self- reliant others

• Be on time for audit, following the audit schedule

Punctual

PERSONAL ATTRIBUTES

• Able to communicate effectively at all levels within an organization

Communicator

• Stay put and stay patient when auditee didn’t react as quickly as you

Patient think they should

AUDIT
PROCESS FLOW

IHA PROCESS FLOW

Audit Planning Audit Audit Report
& Preparation Execution

Follow-up Closing up Management
Audit Audit review

1) Audit Planning & Preparation

Objective: To ensure audit process will be effective

• Preparatory meeting
• Audit criteria
• Checklist
• Opening meeting agenda
• Closing meeting agenda

Preparatory Meeting

• Audit Schedule (Audit plan)
• Purpose of audit

• E.g. To carry internal halal auditing as part of requirements for
assurance and maintenance of halal product

• Personnel affected
• Opening meeting & Closing meeting agenda
• Attendance form
• Audit checklist
• Non Conformances forms

SCOPES OF AUDIT

Documentation Internal Halal Raw material / Equipment
and company Control System ingredients and
processing aid
profile

Packaging and Storage Processing Transportation
labelling

Workers Sanitation system Waste disposal Premise
and premise management compound
cleanliness

Audit Criteria

• Set of policies, procedures or requirements against which
auditor compares collected evidence, used as a reference
standard for halal compliance:

• MS 1500:2019 Halal Food - General Requirements (Third
Revision)

• JAKIM: Manual Procedure for Malaysia Halal Certification

Audit Criteria

▪ Supporting documents
• Fatwa (decree) issued by National Fatwa Council of Malaysia
• MS 1480:2019 Food Safety according to HACCP System (Second
Revision)
• MS 1514:2009 Good Manufacturing Practice (GMP) for
Food
• Food Regulations 1985 (Malaysia)
• Food Act 1983 (Malaysia)
• Handbook of Halal Food Additives (JAKIM)

Checklist

• A list that contains points/elements for assessment.
• Is a tool prepared by auditors for assessing the assurance of the

Halal product.
• It ensures that every aspects of the element/operation clearly

defined and covered.

Checklist

Objective Identification Set The essence Maintain the Act as
evidence that of clauses to requirements for the pace of the reference
an audit was closing
be to be met audit
performed. investigated meeting and
audit report

Checklist

• Think in terms of “ WHAT TO LOOK” and “WHAT TO LOOK
FOR” when preparing checklist questions

• Auditors need to be trained in the use of checklist.
• HOW? Look at the requirements

2) Audit Execution

Opening Conduct Review Closing
meeting audit audit meeting
findings

Adequacy Compliance
audit audit

Opening Meeting

• To explain to the auditee exactly what the purpose of the audit is and
how it is going to be carried out.

1. Introducing audit team to auditee.
2. Circulating an attendance roaster

3. Confirm audit schedule
4. Confirming the audit process & ref std

5. Scope of the audit
6. Confirm format of reporting

Adequacy Audit

• Also known as document evaluation.
• Objectives:-
- To examine the documents in the Halal File and HAS Manual
- To examine supportive documents (e.g. product specification & Halal

Certificate)
- To verify that all elements of the MS 1500:2019 and Halal principle as

required by Shariah laws have been addressed.

Adequacy Audit

• During adequacy audit, it’s not the process that should be audited,
but the activities and documents that surrounds the process.

• Auditors will use checklist as a audit tool for adequacy audit.
• The checklist is derived from the requirements in Malaysian Standard,

Manual Procedure and other related guideline.

Example of
Adequacy Audit

Checklist

(Ahmad Sahir, 2017)

Adequacy Audit

• By using checklist, auditor can assess the adequateness of the
documentation and system by examining each part of the system
thoroughly.

• Auditor will ask auditee all documentation related.
• All files, manuals, SOPs must be readied by auditee prior to the audit.

What are the examples of
documents that will be audited

during adequacy audit?

Relevant Document

COMPANY WORKERS INGREDIENTS

• Company registration • Appointment letter – • Halal certificate from
• Operating License production staff recognized Islamic
• Financial Statement Bodies
• Location map • Appointment letter –
cook • Detailed Product
Specification Material
• Slaughtering Safety Data Sheet
certificate -
slaughterer • Importation Permit
from Department of
• Identification card / veterinary Services for
passport & work meat base raw
permit material

Relevant Document

CLEANLINESS PRODUCT OTHERS

• Cleaning and • Invoice • Process Flow Chart
sanitation record • Delivery order • Plant layout
• Chemical Safety • Registration
• Pest control record
Data Sheet certificate for
transportation
• Internal Halal
Committee
Organisation Chart
• Calibration record

Halal File

• The Halal file is the same document/ files that are prepared by Halal
Certificate applicants during the application stages with JAKIM.

• The file should be maintained and updated.
• The file will also be inspected and audited by JAKIM during

recertification process or during scheduled inspection.

Content of Halal File

1. Registration of company / business
2. Halal Certificate or product specification for critical ingredients
3. Process flow chart and production procedures
4. Company’s annual turnover
5. Manufacturing licences from local authority
6. Copies of ICs and offer letter for Muslims worker at the production area, or cook at

food premise or checker for slaughterhouse.
7. Slaughtering certificate for slaughterer
8. VSM certificate from DVS for slaughterhouse
9. Manufacturing license from Cosmetic and Drug Control Authority (for health

products and cosmetics)
10. Design and label of products
11. Other documents such as HACCP, ISO, GMP, TQM
12. Map of premises / factory location

Flow Chart of Adequacy Audit

Adequacy Audit Review of Completing
documents Checklist

On Site Audit Preparing NCR
report

(Ahmad Sahir, 2017)

Outcome of Adequacy Audit

SATISFACTORY • All halal related documentation has
adequately addressed the Halal requirements
or reference standard

UNSATISFACTORY • Failure to address any procedure for Halal
compliances

• Lack of a document or records for Halal
compliances

Example of
Adequacy Audit

Report

The decision to proceed
with compliance audit
will be determined by

the lead auditor.

(Ahmad Sahir, 2017)

Compliance Audit and
Surveillance Audit

Compliance Audit

• Also known as on site audit.
• For the purpose of recertification and monitoring the Halal system, the

audit is called and known as surveillance audit.
• Objectives:
• To obtain evidence that Halal principles have been effectively applied and

to ascertain full compliance with reference standards and requirements.
• To establish conformity or non-conformity with agreed requirements on

product and process.

Compliance Audit

• The auditor team will move to designated area to assess the
implementation of the halal system. With the help of checklist they
must assess and reassess the effectiveness of the system verifying
every step to prevent haram risk from occurring has been dealt
with.

• e.g In the production area, the auditor will monitor and look for any
possible of haram risk in term of ingredient, procedure and
premises- try to find possible non compliances.

• Check employees credential against existing records tallies with
working conditions such as Malaysian citizen Muslim employee.

Process Flow of a Typical on site /
compliance audit

Opening Review Closing
Meeting Audit Meeting
Finding

Audit Execution Preparing
- Adequacy audit NCR
report
- On site audit

During the on- site Compliance Audit
visit, auditors will:
• Halal Policy
1) Assess • Internal Halal Committee
Management • Halal Executive
commitment • Internal Halal Audit
• Communication on current issues/ potential issues
2) Assess Internal
Halal Committee • Qualification
• Competencies (Training record & Experience)
capability • Internal Halal Audit record

3) Evaluate if all • Internal Halal Audit record
potential non • E.g NEVER-NEVER allowed any non halal materials in
halal issue have
been considered your premises

Opening Meeting

Objectives: To explain to the auditee exactly what the purpose of the
audit is and how it is going to be carried out.

1. Introducing audit team to auditee

2. Circulating an attendance roaster

3. Confirm audit schedule

4. Confirm the audit process and reference standard

5. Confirm the scope of audit

6. Confirm format of reporting