Halal Note Series – Halal Internal Audit No.
2- 2019
Halal Internal Audit Plan: Planning For a Successful Audit Execution
AHMAD SAHIR JAIS
Principal Consultant, HASJ Consultancy / Lecturer, Foodservice Halal Practice, Politeknik Malaysia
Summary: Halal Internal Audit (HIA) requires careful planning, in terms of resources allocation and process execution. Audit Plan, or know as Audit Program is
a series of predetermined guideline to be followed when conducting an audit. The plan helps the auditor to obtain adequate and right evidence for the non-conformances,
helps minimise the impact of the audit program at a manageable level, and helps avoid misunderstandings with the auditee. For HIA, Seven pre-programmed steps
are conceptualised to guide the auditor and auditee in managing a good HIA within a HAS programs.
A successful Halal Internal Audit (HIA) requires careful
preparation, where the allocation of resources and process execution
is deemed as vital. Resources, such as labour, time and expenses are
the crux of any audit plan or program. Labour is indeed needed as
audit requires a human touch and time to the executed auditing
process. Expenses will be incurred during auditing, even though it is
conducted internally. The cost of time-loss for non-performing
members of the organisation not working in the production process,
effect towards the production line during auditing as well as other
incurring cost, should be taken into consideration before the audit.
Fig. 1 Halal Internal Audit Program
Source: See Below
In order to minimise all this to an acceptable level during
auditing, the management, in this case, IHC shall plan their audit
execution based on predetermined steps of Audit Plan. Fig. 1 above,
graphically visualised an Audit Plan from beginning to the end. The
audit plan can be used to strategise where to audit, when to audit and
who shall take the responsibility as auditor and auditee. The audit
plan consisted of 7 pre-arranged steps and involved a multi-layer
process of checked and balanced.
As shown in Fig. 1, the plan consists of seven steps; 1) Audit
planning and preparation, 2) Adequacy Audit, 3) On-site/compliance
audit, 4) Compliance Reporting, 5) Corrective Action Requests, 6)
Closing-up Audit and 7) Follow-up Audit.
The first (Step No. 1) steps begin with the preparation and
planning. IHC at this point is the party that responsible for initiating
the HIA, before being taken over by the appointed auditor during
audit execution. IHC, although responsible for appointing the lead
auditor and the auditor, must severe any relationship between them.
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The lead auditor is preferably somebody outside of the IHC structure,
and so does the auditor. The talent pool and skill to be a halal auditor shall
be planned early on in the Halal training program of the company. For the
ordinary auditor, they can be within the IHC structure, but during the
audit execution, a cross-department audit is a necessity. The IHC will call
for a preparatory meeting, plan the scheduled and timing, the necessary
documentation and other relevant requirements.
Before the audit execution, an opening meeting shall be conducted to
announce the beginning of the audit formally and to sort out any matters
pertaining to the actual audit. The second steps (Step No. 2) of the audit is
the adequacy audit. This audit can be conducted simultaneously with the
on-site / compliance audit (Step No. 3), but preferably, be executed in
advance ahead of the on-site audit. This audit deals more on the needs of
compliances concerning Halal documentation. Documentation regarding
the halal certificate application and the Halal Assurance Systems is checked
to see its adequacy and conformance to the Halal requirements. If the
outcome of the audit indicates satisfactorily, the on-site / compliance audit
may be commenced afterwards. The lead auditor will make a summary
report and presented in the closing meetings. However, if the results
indicate otherwise, each of the non-conformances will be given an NCR
status, depending on its severity.
Issuing NCRs is step number four (Step No. 4) out of seven (7). At this
step, a detailed form of reporting either using the NCRs form or written
report could be prepared, depending on the situation. The interim meeting
could also be held here to find common ground on every NCRs gave from
each of the auditors. For every NCRs, there will be CARs given (Step No.
5), to ensure corrective action is taken to remedy the non-conformances.
Until every NCRs in the adequacy audit has been satisfactorily addressed,
progression to the on-site/compliance audit (Step No. 3) is not
recommended. Adequacy audit is the window to the whole Halal
management system in the company. If the documentation alone is already
insufficient, to begin with, it will affect and reflects the entire Halal
management system. It would be a waste of time to proceed with an on-
site audit, knowing that scores of NCRs and CARs would be found
ceaselessly.
Again, if the outcome of the adequacy audit indicates satisfaction, the
on-site audit may be commenced. There are there given scenarios in the on-
site audit; Scenario A, B and C.
For Scenario A, during the audit, NCR is found, NCRs and CARs are
raised. In these scenarios, the NCRs and CARs would not be able to be
rectified before the closing meeting (Step No. 6) and requires more time to
be given to remedy the problem. Hence, a follow-up audit (Step No. 7) is
required. NCRs and CARs can only be closed after the follow-up audit.
Scenarios B is the opposite of Scenario A. Both NCRs and CARs can be
rectified in time before the closing meeting, and the status shall be reported
as “closed” in the report. This scenario does not need a follow-up audit.
The final Scenarios C is when no NCRs can be detected, although highly
unlikely. This is an unlikely situation where NCRs is not found, but in
small scale business with a smaller number of products, this might happen.
This step-by-step Audit Plan is designed to help IHC and Halal
Executive to manage better and execute their HIA program, systematically
and methodically. By following the prescribed steps, the confusion on how
to conduct an internal audit could be lessened.
This notes on the internal Halal audit is extracted with permission from the books
“Halal Internal Auditing - For Foodservice and Food-Based Manufacturing” (2019),
Published by HASJ Consultancy