 Halal Audit System and Consumerism

 Development in Islamic Finance and

why should we learn from Islamic
finance industry
Presented by:
Norjanah g. guro
 Outline
 DEFINITION OF TERMS
 Understanding the Need for Halal Auditing
 The Benefits of Halal Auditing
 The Halal Audit Process
 Halal Audit Certification Bodies
 The Role Of Halal Certification Bodies
 Halal Audit Requirements
 The Principles And Practices Of Halal Auditing
 Impact Of Halal Auditing On Businesses
 Types Of Halal Audits
 Common Problems Identified During Halal Audits
 Challenges Of Halal Auditing
 Halal Foods

Halal Audit

Consumerism

Halal Consumerism
DEFINITION OF TERMS
 DEFINITION OF TERMS
Halal Foods

Halal Consumerism
Halal food refers to food
and beverages that are

Consumerism
permissible, lawful, and

Halal Audit
compliant with Islamic
dietary laws, as outlined in
the Quran, and the
Hadith. The opposite of
halal is "haram," which
means forbidden or
prohibited. Halal certified
food ensures that the food
produced is prepared in a
way that is free from cross
contamination or does not
have haram ingredients
DEFINITION OF TERMS
Halal Audit
A Halal audit is a thorough

Halal Consumerism
inspection that verifies an
organization or product
meets Islamic law’s

Consumerism
religious and ethical
Halal Foods

principles. It’s part of a

more significant effort to
ensure products are
produced according to
Muslim standards, which
include avoiding alcohol,
pork, gelatin-based
ingredients, certain animal
fats, and other components
not approved by Sharia
Law. The primary purpose
of a halal audit is to assess
whether an entity complies
DEFINITION OF TERMS

Halal Consumerism
Consumerism
Halal Foods

Halal Audit
Consumerism is a social
and economic ideology or
movement that emphasizes
the acquisition and
consumption of goods and
services as a primary goal
and a fundamental source of
personal happiness and
social progress.
(https://www.investopedia.com/terms/c/consumerism.asp)
DEFINITION OF TERMS
Halal Consumerism
Is a specific form of
consumer behavior and

Consumerism
economic activity that
Halal Foods

Halal Audit
adheres to Islamic principles
and guidelines. It places a
strong emphasis on
purchasing and consuming
products and services that
are considered permissible
(halal) according to Islamic
law (Sharia). Islamic
consumerism is guided by
religious and ethical
considerations, and it aims
to align economic activities
with Islamic values and
principles. (https://halalfocus.net/islamic-
 Outline
 Understanding the Need for Halal  The Halal Audit Process
Auditing  Halal Audit Certification Bodies
 The Benefits of Halal Auditing  The Role Of Halal Certification
Bodies
 Understanding the Need for Halal Auditing

Halal auditing is essential, particularly in countries

where most people follow Islamic dietary laws.
Ensuring that food labelled’ halal’ complies with all
relevant religious and legal standards is necessary. To
do this, a qualified auditor will inspect the
production process to verify compliance with those
standards.

Companies can demonstrate their commitment to

producing only high-quality halal food items by
conducting regular audits. This helps build consumer
trust and loyalty among Muslim consumers, who
now have access to more information and resources
than ever before when making informed decisions
about what they eat. Audits also help keep businesses
on track with regulations related to health and safety,
ingredient sourcing, sustainability practices, and
 The Benefits Of Halal Auditing
 It assures consumers that their foods are genuine and
meet all necessary standards. Consumers can trust more
confidently, knowing they’re buying a product that isn’t
only safe but also meets religious requirements.

 Halal certification ensures companies comply with laws

and regulations related to food production and handling.
This gives producers and distributors peace of mind
when trading internationally and domestically – no matter
where the market may be located.

 Finally, having a clear audit trail for every step of the

supply chain reduces business costs associated with
recalls or other costly problems arising from non-
compliance or contamination issues – something which
could otherwise have been avoided if left unchecked.
Companies get added value, too; Halal Auditors will often
advise on how best to maintain standards throughout the
entire operation’s lifecycle, ensuring customers remain
happy while staying true to religious practices at all
 The Halal Audit Process
The halal audit process is crucial for companies looking to
provide safe and compliant products. It involves an
independent third-party assessor visiting the premises,
assessing product ingredients, labelling, and production
practices by relevant standards. This step ensures all
processes comply with Islamic law and other applicable laws.

Once the assessment has been completed, the auditor will

issue reports outlining any issues identified during the audit.
Companies must then act on these findings and ensure
appropriate measures are taken to correct non-compliance or
shortcomings. The auditor may also recommend additional
steps, such as further training or procedure changes, to help
improve compliance levels.

Companies should be aware of their obligations regarding

halal audits and take them seriously – failure to do so could
result in significant financial losses, reputation damage, or
 Halal Audit Certification Bodies
THE MOST COMMON CERTIFYING BODIES INCLUDE:

 The Malaysian Department of Islamic Development (JAKIM)

 United Kingdom Accreditation Service (UKAS)
 Emirates Authority for Standardization & Metrology (ESMA)
 Halal Food Council International (HFCI).
PHILIPPINES HALAL CERTIFICATION BODIES
(HCB)
 National Commission on Muslim Filipinos
 Halal International Chamber of Commerce
 and Industries of the Philippines (HICCIP)
 Halal Development Institute of the Philippines
(HDIP)
 Ulama League of the Philippines
 Islamic Da’wah Council of the Philippines (IDCP)
 Muslim Mindanao Halal Certification Board, Inc.
(MMHCBi)
 Mindanao Halal Authority (MinHA)
 Philippines Ulama Congress Organization Inc.
 Alliance for Halal Integrity in the Philippines Inc.
 PRIME Certification and Inspection Asia Pacific Inc.
 The Role Of Halal Certification Bodies
The role of halal certification bodies is critical in obtaining a valid
and recognised certification for products intended to be sold as
‘halal’. Certification bodies are responsible for ensuring that all
parties involved adhere to the strict guidelines set forth by Islamic
law regarding food production, manufacture, sale and
consumption. They examine every aspect of a product’s supply
chain, from its source material to its final delivery, guaranteeing
compliance with religious requirements at each step.

Certification bodies also play an essential role in protecting

consumers. By verifying the authenticity of products claiming to
be halal certified, they help ensure that customers can trust what
they’re buying meets their expectations. Additionally, certifying
organisations provide that producers follow proper safety
protocols within their facilities, so shoppers receive safe and
hygienic goods free from contamination or other health risks.
 Outline
Halal Audit Requirements The Principles And Practices Of Halal Impact Of Halal Auditing On
Auditing Businesses
Halal Audit Requirements
Halal audit requirements are an essential part of the halal certification process. For
products to be certified as halal, they must not only meet specific criteria but also
undergo a rigorous audit by a qualified and accredited auditor. The precise
requirements of these audits vary depending on the product and country but
typically involve verifying that all ingredients used in the production are acceptable
under Islamic law.

The purpose of this audit is twofold: firstly, it ensures that no haram (prohibited)
materials have been included in the final product; secondly, it assures that
manufacturing processes comply with accepted standards for producing safe food.
Auditors use various techniques to guarantee the accuracy, including laboratory
testing and on-site inspections at suppliers’ premises. They may also review
documents related to supply chains, such as contracts and invoices.

Audits can be time-consuming and costly, so companies must allocate their

resources appropriately to minimise disruption during the process. This includes
training staff on relevant regulations, organising facilities for inspection visits where
necessary, and providing sufficient evidence of compliance when requested.
Ultimately, businesses should view halal audits as an investment to increase
consumer trust in their brand while helping them access new markets worldwide.
The Principles And Practices Of Halal Auditing

The principles and practices of halal auditing are highly

complex yet crucial for ensuring a product or service
complies with Islamic law. It requires meticulous
attention to detail and extensive knowledge of the subject
matter.

 A detailed review of all applicable laws, regulations,

and standards that govern the production of Halal
items.
 An evaluation of the manufacturing process and
ingredients used to ensure they meet all requirements.
 Identification and correction of any non-compliant
areas within the system.
The Principles And Practices Of Halal Auditing
To guarantee success in this area, an audit team must be able
to interpret relevant legal documents while also understanding
how various components interact to create consistent results.
This involves technical skills and a deep appreciation for
cultural sensitivities surrounding religious dietary restrictions.

Auditors must possess strong communication skills to

communicate their findings with clients and stakeholders
effectively. They must also consider economic factors such as
cost-effectiveness when evaluating compliance solutions –
something which will ultimately determine whether a product
meets its desired level of quality assurance.
Impact Of Halal Auditing On Businesses
Halal auditing can significantly impact businesses, both
positively and negatively. On the one hand, it is an
opportunity for companies to demonstrate their
commitment to ethical practices and compliance with
regulations. This, in turn, would help build customer
trust and increase sales.

Halal audits are often associated with extra costs that

businesses may not be able or willing to bear. There is
also a risk of disruption during the audit process, which
could disrupt operations and damage customer
relationships. Therefore, businesses need to weigh these
pros and cons carefully before deciding whether to opt
for this type of audit.
Outline
Types Of Halal Audits

Common Problems Identified

During Halal Audits

Challenges Of Halal Auditing

 Types Of Halal Audits

 Internal Audit - This type of audit helps

identify any compliance gaps within the
organisation. It also assesses whether
necessary checks and balances are
implemented to ensure adherence to these
standards.
 External audits - Involve third-party
organisations that independently review
and evaluate a company’s operations
against established industry standards.
These audits help establish credibility by
assuring that processes comply with
relevant regulations and provide valuable
feedback on areas where improvements
could be made.
 Common Problems Identified
During Halal Audits
Cross-contamination - This could occur if
non-halal products were processed on the
same equipment as halal ones, where traces
of one could end up in the other. Poor
storage practices, such as storing different
types of foods together, can also lead to this
problem.
Hygiene processes must also be closely
adhered to pass a halal audit. Failure to do
so could result in microorganisms present
in the product, which would render it
unsuitable for consumption by Muslims
according to Islamic law.
Maintaining proper records regarding raw
materials and their sources could also fail
the audit.
 Challenges Of Halal Auditing
♥ finding qualified personnel who can perform halal audits
effectively. It’s not easy to find individuals or
organisations specialised in this area, and those that do
exist may be expensive. It can be difficult for a business
to choose the right auditor since they need someone
experienced and willing to work within their budget
constraints.

♥ critical challenge with halal auditing is keeping up with

ever-changing standards, regulations and laws related to
food production and other relevant sectors such as
finance, agriculture, industry and more. Companies must
stay on top of these changes so that their audit processes
remain accurate and up-to-date; otherwise, they risk
having products fail certification tests and potentially
losing customers, who could have significant financial
implications.