CHAPTER 5

HALAL INTERNAL AUDIT

FACILITATION

PART 1 : MANAGE AUDIT

PROGRAM
Content
1.0 Audit category to be performed
• 1.1 First-party audit (internal audit)
• 1.2 Second-party audit (external audit)
• 1.3 Third-party audit (external audit)
2.0 Objective and scope of audit
• 2.1 Defining audit objectives, scope and criteria
• 2.2 Audit process
3.0 Audit Master Plan
• 3.1 Identify audit frequency and schedule per year
• 3.2 Prepare audit schedule
• 3.3 Determine assignment of audit team
• 3.4 Identify lead auditor and auditor(s) to perform audit
• 3.5 Generate audit itinerary / plan
 OBJECTIVES
•To ensure on going compliance to:
Shariah laws & principles of Halal &
haram in Islam with regards to Halal
certification.
MS 1500:2019 & JAKIM Manual
Procedure of Halal Certification
Malaysia MPPHM (D) 2020.
1.0 Audit category to be performed

• A compliance audit is a comprehensive review of an organization’s

adherence to regulatory guidelines.
• The product shall in other aspects comply with legislation including
other relevant requirement currently in force in Malaysia.
• This shall be verified through audit inspection to all supply chain process.
• An audit is an evidence
gathering process.
Audit evidence is used to
evaluate how well audit criteria
are being met.
• Audits must be objective,
impartial, and independent, and
the audit process must be both
systematic and documented.
Types of Audit
1. Adequacy audit
2. Compliance Audit
3. Follow Up Audit
 Type of audit
1. Adequacy audit

A desk-top / document audit to examine the contents of

all supportive documents as required by the JAKIM:
General Requirements for Halal Certification including
Halal Certificates, records, list of ingredients and
packaging materials are submitted to verify that all the
requirements of the MS1500:2019 and Manual Procedure
of Halal Certification Malaysia have been addressed.
 Type of audit
2. Compliance Audit

An activity to obtain evidence that requirements of the

MS 1500:2019 and Manual Procedure of Halal
Certification Malaysia (Domestic) 2020 have been
complied. It includes adequacy, on-site and follow-up
audits. Compliance audit is conducted by means of an
independent, impartial and objective audit to ascertain
full compliance with the MS 1500:2019 and MPPHM (D)
2020 criteria and requirements.
 Type of audit
3. Follow Up Audit

The follow-up activity to obtain evidence that the non-

conformance given as CAR(s) are being satisfactorily
corrected and implemented and that the Halal
procedures and requirements have been maintained. A
follow-up audit can be on-site or adequacy / document
audit.
There are three categories of
audits
First-party audit

Second-party audit

Third-party audit.
1.1 First-party audit (internal audit)

First party or Internal Audits are those where

an organization carries out audits on itself or
self-assessment.

It can be used as a very effective

management tool, which can help
organization adopt a proactive and best
practice approach to Halal Assurance System.
This type of audit also can be used by
company to
To measure the strengths and weaknesses
against requirements and organization own
standards

To confirm or improve the effectiveness of Halal

Management Systems

To ensure that an organization complies with

the company Halal Policy (this is called self-
declaration).
1.2 Second-party audit (external audit)

Second party audits are commonly known as

Supplier Audits because they are used where
an organization has to assure itself of the
ability of a potential or existing supplier to
meet the requirements of the company’s
halal policy.
1.3Third-party audit (external audit)

Third party audits also known as external

audits. However, they’re performed by
independent organizations such as
registrars (certification bodies) or
regulators.
CHAPTER 5:
HALAL INTERNAL AUDIT FACILITATION
PART 1 : MANAGE AUDIT PROGRAM

• 2.0 Objective and scope of audit

• 2.1 Defining audit objectives, scope and criteria
• 2.2 Audit process
2.0 Objective and scope of audit
 The audit objectives shall describe what is to be
accomplished by the audit and shall include the following:
 Determination of the conformity of the company HAS, or
parts of it, with audit criteria
 Evaluation of the ability of the HAS to ensure the company
meets applicable statutory, regulatory and contractual
requirements
2.1 Defining audit objectives, scope and
criteria
b. These describe what this
particular audit is all about;
provide guidance for the audit
leader and the team as to what
they should be
inspecting/verifying during
audit.

a. The audit team needs

to be informed of the
objectives, scope and
criteria for the audit.
c. The objectives set out what the audit is trying to achieve, such as:

Determine eligibility for Determine suitability to appear

certificate award on a contract shortlist

Demonstrates improvements in
a previously identified weak Confirm adherence to policy
area

Identify areas for potential

improvement;
d. The scope of audit
• A statement that specifies the focus, extent and boundary of
a particular audit.

• Can be specified by defining

the physical location of audit,
the organizational units that will be examined,
the processes and activities that will be included
the time that will be covered.
e. The criteria for the audit represent those rules and
requirements against which audited organization/auditee will be
assessed.

These might include:

Standards
Policies
Legislation procedures
Figure: Example food supply chain for food product.

Source: http://www.google.com
2.2 The audit process will depends on the industry
based on Manual Halal Certification Scheme:

Food product / beverages / food supplement 

Food premise / hotel 

Consumer Goods 

Cosmetic and personal care 

Slaughter house/abattoir  

Pharmaceutical

Contract Manufacturer / Original Equipment Manufacturer (OEM)

Medical device
3.0 Audit Master Plan
• Establishing a regular schedule of internal audit will develop
confidence in their own system based on objective evidence. The
ongoing process of auditing and being audited will also increase the
halal awareness among all the staff.

• An Audit plan is the specific guideline to be followed when

conducting an audit. It helps the auditor obtain sufficient appropriate
evidence for the circumstances, helps keep audit costs at a
reasonable level, and helps avoid misunderstandings with the client.

• The company shall ensure that an audit plan is established for each
audit that has been identified in the audit programme to provide the
basis for agreement regarding the conduct and scheduling of the
audit activities
• 3.2 Prepare audit schedule
An audit program shall be planned, taking into consideration the
status of importance of the process and area to be audited, as
well as the results of previous audits. In order to prepare Halal
Audit plan, the below question should be consider:
• What are the objectives of the audit?
• Where will the audit be conducted? (i.e. scope)
• When will the audit(s) occur? (how long?)
• Who are the auditors?
• How will the audit be implemented?
3.3 Determine assignment of
audit team

• 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 that
audit.
3.4 Identify lead auditor and auditor(s) to perform audit

• MHMS 2020 : Juruaudit Halal Dalaman hendaklah mempunyai

Sijil Internal Halal Auditing/ Sijil Eksekutif Halal daripada PLH
yang berdaftar di bawah HPB
 3.5 Generate audit itinerary / plan

• The company shall have documented

procedures for determining audit time,
and for each client the company shall
to determine the time needed to plan
and accomplish a complete and
effective audit of the client’s
management system.
• The audit time determined by the
company and the justification for the
determination shall be recorded.
CHAPTER 5

HALAL INTERNAL AUDIT

FACILITATION

PART 2 : LIAISE WITH AUDITORS

AND AUDITEES
Content
1.0 INTRODUCTION

2.0 PREPARATION OF AUDIT CORRESPONDENCE

• 2.1 Date and time
• 2.2 Audit team / auditors formation
• 2.3 Scope of audit
• 2.4 Movement of auditors and itinerary
• 2.5 Other audit program activities

3.0 NOTICE / MEMO / LETTER WRITING GUIDELINES

4.0 METHOD OF NOTIFICATION

5.0 OBTAIN HALAL AUDIT REPORT

5.1 Understanding Non-Conformance
5.2 Presentation of Audit Findings
5.2.1 Recording/Raising of Non-Conformance Report
5.2.2 Result of the audit (position statement)
5.2.3 Signatories of auditors and date
5.2.4 Audit report distribution
5.2.5 Audit with non-conformances
1.0 INTRODUCTION
• An audit can and should be as painless as possible. Most
people become anxious about audits because they fear the
“unknown”, however, the internal audit process is not
designed to be a “surprise attack”. The audit team works with
the audit client during every step of the process to “help
improve operations and add value to the organization”.

• Part of audit scope is to liaise with auditor and/or auditee.

Coordination between auditors is important because the
potential to increase the efficiency and effectiveness of total
audit activity for the company. Without effective coordination
and reporting, work can be duplicated or key risk may be
missed or misjudge.
• Interal Halal Committee (IHC)
Chairman shall provide
notification to auditee as a
guide and the smooth of audit
process. This notification can be
provide before audit execution
whether by audit schedule,
yearly notification

• Auditor/auditee also should

obtain the audit report from
auditor/auditee.

• The concept and the format of

report must be clear and
comprehensive.
2.0 PREPARATION OF AUDIT CORRESPONDENCE

• Preparing the Audit Notification

(AN) to auditor/auditee is one
of the IHC responsibilities.

• To prepare the audit

notification, the person must
have knowledge on HAS, the
scope of audit and the format
of the notification.
• To prepare this notice/memo, the person must understand the content/format of this
notification.

• The format must consist of:

2.1 Date and time

2.2 Audit team/ auditors formation

2.3 Scope of audit

2.4 Movement of auditors/ itinerary

2.5 Other audit programs activities

• The more work that is put into the
planning and preparation of an audit, the
smoother the conduct of the audit will be
on the day. The audit should be planned
based on the state and importance of the
activities.

• The lead auditor is responsible to plan the

schedule i.e. to make sure there are no
coinciding major events in the company.
The Lead auditor will assist the Internal
Halal Committee members in arranging for
the auditing dates and time with the
auditors and auditees.
• Ensure that all relevant people will be
available during the audit. Once the
audit schedule is ready it should be
circulated to the auditees, internal halal
auditors.

• So, date and time of audit execution

must clearly state on this notification.
This to ensure the record of time and
date of this process is documented. If
anything happen during this audit
process, this notification can be one of
the elements of the record and
traceability’s
• Auditor or auditee will refer to
notification date stated to
determine when the audit team
will inspect the premise. Then, the
auditee will prepare all the
necessary things before the audit
process happen.
• The date and time has to be
schedule according to
company/organisation plan. The
person must always acknowledge
about company activities and
plan.

• One of the issues pertaining to

this is sometime when the audit
team inspect the premise, and at
that time there are no processes
to be audit, then the audit team
have to postpone or delay the
audit process.
•
• Rescheduling the process
sometime will affect the timeline
and other programs. So, the date
and time is very important
element on this notification.
 • Audits may result in reports containing quantitative
measurements or they may provide qualitative judgments
on the appropriateness of the program in relation to HAS
goals.

• The designation of audit

formation is based on the
audit scheme (manufacturing,
restaurant, logistic etc), Halal
Control Point (HCP) such as
production area, adequacy or
documentation, management
or others element such as
enforcement issue.
• For Halal Internal Audit (HIA), one of the important elements
is designation and responsibilities of auditor.

Manual
Procedure of
Malaysian
Halal
Certification,

Fatwa’s and
others. HAS

The
lead
audit
or
Malaysia Knowledge
Standard on halal

Muslim

The criteria of The Lead Auditor

• Auditor also as technical expert. For example, if the scheme is
for food manufacturing, so the follower auditor must have a
related knowledge and background such as food technologies
and food science. Also, this person also must have knowledge
pertaining to Shari’ah and the related issue.
Aspects to be considered when assembling an audit team are:
The audit scope, that is, amount of work required
to do the audit

The purpose of the audit: this determines the

type of audit and may determine level of detail
necessary

The organizational area to be audited: this will

help decide what skill or expertise will be
necessary to conduct the audit

The availability of potential audit team

members, which is largely a function of the audit
schedule.
• Auditee
• Facilitate audit process
• Provide cooperation during the audit
• The scope of an audit is a statement that specifies the focus,
extent, and boundary of a particular audit. The scope can be
specified by defining the physical location of the audit, the
organizational units that will be examined, the processes and
activities that will be included, and the time period that will
be covered.

• Audit scope includes, where appropriate: audit objectives;

nature and extent of auditing procedures performed; time
period audited; and related activities not audited in order to
delineate the boundaries of the audit.
• The scope and objectives for every
audit are determined through
discussion with the department's
management or IHC and a department
specific risk assessment. While each
audit is unique, there are some general
or common objectives applied to most
audits.
 AUDIT PLANNING &
PREPARATION
• An Audit plan is the specific • Standard references
guideline to be followed » MS 1500:2019 Halal Food Production, Preparation,
Handling & Storage
when conducting an audit. » JAKIM: Manual Procedure of Halal Certification
It helps the auditor obtain Malaysia ; MPPHM (D) 2020

sufficient appropriate • Halal Checklist

evidence for the • Opening meeting agenda
circumstances, helps keep • Closing meeting agenda
audit costs at a reasonable • Audit schedule
level, and helps avoid
• Attendance form
misunderstandings with
the client. • Non conformances forms
XYZ SDN BHD F66 (Rev: 00)

Effective Date: Page 1 of 1

AUDIT PLAN
Year : _____

Au
Item  Audit Scope Auditee Department Jan Feb Mar Apr May Jun Jul g Sep Oct Nov Dec

Prepared
by : Approved by :
The benefit of audit plan is:
To helps the auditor obtain sufficient appropriate
evidence for the circumstances

It helps keep audit costs at a reasonable level.

It helps avoid misunderstandings with the client.

It helps to know the scope of audit program by

an Auditor.
• One of the elements of audit plan is the movement and
itinerary of audit program. Halal Executive (HE) as audit
coordinator has to ensure the itinerary to be informed
and notify to the audit team.
• The itinerary must consist of the date and time, the
duration and time frame taken between each of audit
process, the department and scope to be audit and
other related information.
Can you prepare a itinerary of mock auditing
in your Food Manufacturing Company?
• Other activities for audit plan and itinerary shall be mention
on this notification. Example, the un-announced audit, the
supplier audit, the documentation audit only or other type
and categories of audit.

• Sometime, the management or other parties will be joining

together with audit team. So this should also be mention on
the notification so that the audit team acknowledges the
program changes. This to ensure that lead auditor will plan
and guide the other parties on audit process.
3.0 NOTICE / MEMO / LETTER
WRITING GUIDELINES
• Audit coordinator must have a
knowledge and skill on how to write
the notification letter or memo.

• The knowledge and skill must consist

of minimum and not limited to:
Grammar, Spelling and Punctuation
The style, purpose and strategy
Research and resource
Using precise and concise language
4.0 METHOD OF NOTIFICATION
• The method of audit notification can be in any way that easy
to communicate with audit team and participants.
• Review the Information Request List and determine if the
items requested are available and in what form (e.g.,
electronic, microfilm, reports, etc.).
• There are many tool to send the notification and can be
divided into two categories:
• Soft-copy (email, social media)
• Hardcopy (memo/ letter/ notice)
5.0 OBTAIN HALAL AUDIT
REPORT
• Another job scope for audit coordinator is to obtain the Halal
Audit Report (HAR) and present to Internal Halal Committee
(IHC).
• The audit coordinator of Halal Executive (HE) must have
knowledge on the all related standard and requirement on
halal audit scope. This to ensure the HE understands the audit
report before the presentation to the IHC or management.
• Audit report can be obtained from audit team after closing
meeting. HE or coordinator must ensure the audit team
explained all the result of audit including the non-
conferment report (NCR). Failing to do that will affect the
presentation to the IHC member and also the whole Halal
Assurance System (HAS).
5.1 Understanding Non-Conformance
Non-conformance is an evidence of a failure
or non-fulfillment of specified
requirements.

They are raised in the event of:

Not meeting a specified clause/s of a standard
e.g. MS1500:2019, MPPHM, HAS
Not meeting a part of a procedure
Not meeting other recognized specification or regulation
The main source of information for a non-conformity statement is
the completed checklist.
Non-Conformances will be recorded whenever the auditor
discovers that the Halal Requirements are inadequate or they are
adequate but are not being followed correctly.
 Minor Non-Conformance
(no non-halal risk)

This occurs in the

following circumstances:
• Cleanliness issues
• Hygiene issues
 Smoking in Food Areas
Being Sick at Work
Poor Personal Hygiene Open Cuts
Dirty Hands
Dirty Uniforms
Dirty Finger Nails
Bad Food Storage
Dirty Kitchens

Fridge Not Dirty Stove Tops Old Chopping

Cleaned Boards
 Major Non-
Conformance
This could lead to a non-halal risk if not controlled.
 Any condition or situation rated major requires of a plan or
program for rapid improvement.
Repetitive or cumulative major ratings can lead to a seriously
situation.

This occurs in the following circumstances:

Utensils used for non-halal can be
ritually cleaned (sertu/samak) once only
No segregation between halal and
non-halal product in the storage area
 Serious Non-
Conformance
Are unacceptable or critical situations representing a non-
halal risk. Any serious rating requires immediate response and
corrective action.
 This occurs in the following circumstances:
 Ingredients containing pig derivatives
 Product containing alcoholic beverages such as wine
Doubtful ingredients???

“Heineken 0.0 is double brewed

with 100% natural ingredients,
and only 53 calories per 250ml
serving. We gently remove the
alcohol through vacuum
distillation and blend the brew to
perfection to ensure that same
great Heineken taste,” she said.
(Sumber:
https://www.theedgemarkets.co
m/…/heineken-launches-
zeroalco… )
Certificate of Meat Slaughtered by
Muslims
5.2 Presentation of Audit Findings
5.2.1 Recording/Raising of Non-Conformance Report
 Any non- conformity must be formally presented to the auditee in
order to initiate corrective action. The normal approach is by raising
the non-conformance report (NCR) which includes the followings:
 Date of the audit
 Details of the non-conformance
The facts, requirement and nature of non-conformity precisely
stated, may include data (if any)
This section of the record should carry sufficient detail about each
non-conformance to answer the questions: what, where, when,
why, who and how.
It should also list the evidence found to substantiate the non-
conformances in terms of records or documents seen, activities
observed, or staff spoken to.
This section is then signed and dated by the auditor once the
details of the non conformances have been discussed and
agreed at the closing meeting
 Clause of the standard
 Site or departmental audited
 Auditee witnessing the
non-conformance
 A corrective action
plan and date of completion
of the non-conformance
• The results of the Halal audit must be documented in a formal
manner and presented to the management at the end of the
audit.
• Audit report is document that gives a summarization of the
audit findings. The report will also highlight the audit team’s
opinion, facts and views presented at the closing meeting,
comments expressed by the auditee and positive aspects
found during the audit.

• A verbal audit report should be done at the end of the audit

session (closing meeting). The audit report format should
capture all the vital information and straight forward to write
and easy to understand. The auditor should write the draft
audit report as soon as possible after performing the audit
A compliance audit report is produced after every compliance audit whether
or not any Non conformances have been discovered.
The purposes of this report are to:

Purpose
• Record the key reference data relating to the halal auditing such
as date, scope, area assessed, name of audit team etc
• Summaries the main findings of the audit and refer to any non-
conformances identified.
• Document suggestions for any corrective action including target
dates to rectify any non-conformances found
• Record the nature and timescale of any agreed follow-up visits.
• A formal record of what areas of the organization were audited
and when.
• An indication of those areas of the organization that appear to
comply with the requirements of Halal.
• A suggested program of corrective action including target dates
to rectify any non conformances found.
5.2.1.1 Content of Audit Report
Introduction
Company name & address, dates of audit
Names of auditors
Reference documents against which the audit was conducted
Objectives and scope of the audit
The name of areas, functions or departments visited and the
processes audited
Total number of major and minor non-conformances raised
and number of observations recorded.
Identifies the auditee
Distribution list for reports
Summary
An overview of the audit including comments on the significant
trend or feature found during the audit.
It is also very important to ensure that the summary is as
evaluative as possible and not merely descriptive
The summary should be factual and fair
Opening meeting
Record of attendance and if a problem became apparent how it is
resolved
Closing meeting
Record of attendance and details of any problem arise
Non-conformances
Brief description of non-conformances found
5.2.2 Result of the audit (position statement)
Summary of corrective action
The non-conformance reference number
Who is responsible for carrying out the corrective action?
The agreed corrective action to be taken
The date when the corrective action will be completed

Agreed follow-up audit:

The agreed follow-up action in terms of its scope and timescales
5.2.4 Audit report distribution
• Once the compliance audit report and any associated non-
conformances records and/ or observation notes have been
signed off, they should be provided to the auditee so that they
can proceed with the corrective action programme.
5.2.5 Audit with non-conformances
• If no Non-conformances are found
during an audit then the summary
of agreed corrective actions and
the agreed audit follow up
sections of the compliance audit
report should be left blank. The
audit can then be completed by
the Auditor and auditee signing
off the audit closed section of the
compliance audit report during
the closing meeting.
CLOSING A NON-CONFORMANCES
REPORTS (NCRS) AND
CORRECTIVE ACTION REQUESTS
(CARS) IN HALAL INTERNAL
AUDIT
Towards the end of the Halal internal auditing process, any NCRs given by
the auditor must be “Closed”.

The terms “Closed” here, indicate that corrective actions have been taken
to repair the said non-conformances at its root’s cause, to prevent similar
incidents happening in the future.
Process Flow
Chart for
Closing NCRs
• Each NCRs can only be closed if corrective action or control
measures have been initiated.

• If the correction can be executed on the spot, the NCRs can be

closed at that time.

• Before closing any NCR, the effectiveness of the measure must

be assessed.

• The corrective action is then recorded and documented,

included in the overall audit report and archived.

• During the review of the HAS programs, audit finding such as

this is valuable to give the IHC valuable data on the
implementation of internal Halal control.
Corrective/
Preventive
Action Request
 CARs Form – Signatures for Compliances

• Document record that indicates that NCRs has been addressed is the CARs
forms.
• The third column in the signatures section can only be signed if the CARs
has been rectified (refer to Figure 2).
• Pay attention to the date of when the column is signed, “26th November
2019”.
• This indicates that the CARs measures have been rectified on the same day
where NCRs are found.
• Figure 3, illustrates a situation where CARs are closed on a later date.
• The signature of the first and second column (refer Figure 3) indicates that the
NCRs and CARs were issued on the 26th November 2019, the day of the audit.
• The auditee also acknowledges the non-conformances right there and then.
• The due date for implementation of CARs was given up until the 2nd of December
2019 by the auditor during closing meeting.
• The due date also indicates, when a follow-up audit is required.
• The third column is only signed on the 3rd of December 2019, a day after the due
date ended.
• If the corrective action is found not to be satisfactory or have a
little effect of the NCRs, or worse, no effort to fixed and
remedy the NCRs; it shall be recorded as evidence of unclosed
NCRs and a new NCRs shall be issued.

• The second issued NCRs on the same non-conformance, shall

be classified as a new class of NCRs.

• For example in the last audit, the NC were classified as minor,

after CARs and follow-up audit has been conducted, the
problem is still not rectified or inefficiently tackled, then a new
NCRs shall be issued.

• This time, it shall be classified and major.

• This is to show the severity of the NCRs, and its effects towards
the Halal integrity within the business operations.
 Management review
• to ensure the continuity suitability, adequacy, feedback and
effectiveness of the halal practices.
• should be conducted at appropriate interval at least once a year
and that record all review is maintained
• involves the internal halal committee and the management
• To discuss issues related to development, implementation,
maintenance and review of halal practices as well as
opportunities to improve the halal practices.
• Prerequisite : summary report of audit results and a status of
NCR. This is required as to solve the problem and proper
corrective action is taken.