Montine foods limited

INTERNAL AUDIT
DEPARTMENT
STANDARD OPERATING PROCEDURE

REVISION: 00
REV. DATE: 01/04/19
SERIAL NO: ……………...
REF: MFL/IAD/DPT/SOP-00 2019

2019
 INTERNAL AUDIT DEPARTMENT

Contents
Contents ........................................................................................................................................................ 2

A. DOCUMENT CONTROL .............................................................................................................................. 4

A.1. Preparation, Review, Approval and Issue. ......................................................................................... 4

A.2. Circulation List ................................................................................................................................... 4

B. RESPONSIBILITY TO ENSURE THAT THE PROCEDURE IS FOLLOWED ........................................................ 4

C. REFERENCES .............................................................................................................................................. 4

1. PURPOSE ................................................................................................................................................... 5

2. SCOPE ........................................................................................................................................................ 5

3. OBJECTIVES ............................................................................................................................................... 5

3.1 Department objectives ....................................................................................................................... 5

3.2 Procedure objectives .......................................................................................................................... 6

4. THE STRUCTURE OF ORGANISATION OF INTERNAL DEPARTMENT, ROLES & RESPONSIBILITIES. ............ 7

4.1 The Structure of Organization............................................................................................................. 7

4.2 The Roles and Responsibilities ............................................................................................................ 8

4.2.1 The Audit Manager ...................................................................................................................... 8

4.2.2 The audit team members............................................................................................................. 8

5. DESCRIPTION OF THE ACTIVITIES ............................................................................................................ 10

5.1 General .............................................................................................................................................. 10

5.2 Description of Activities .................................................................................................................... 10

5.2.1 Planning and establishing audit programme. ............................................................................ 10

5.2.2 The Audit Process....................................................................................................................... 10

6. RISK AND OPPORTUNITY MANAGEMENT ............................................................................................... 13

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6.1 General .............................................................................................................................................. 13

6.2 Risks and risk management .............................................................................................................. 13

6.3 Opportunity management ................................................................................................................ 14

7. RECORDS ................................................................................................................................................. 15

7.1 General .............................................................................................................................................. 15

7.2 Audit Programme records ................................................................................................................. 15

7.3 Checklists........................................................................................................................................... 15

7.4 Audit Reports .................................................................................................................................... 15

7.5 Corrective Action Requests (CARS) ................................................................................................... 15

8. RECORD OF AMENDMENTS MADE TO THE PROCEDURE ........................................................................ 16

9. APPENDICES ............................................................................................................................................ 17

9.1 Acronyms .......................................................................................................................................... 17

9.2 Terms and definitions ....................................................................................................................... 17

9.3 Forms ................................................................................................................................................ 19

9.3.1 General ....................................................................................................................................... 19

9.3.2 Audit Programme Form ............................................................................................................. 19

9.3.3 Checklist Form............................................................................................................................ 20

9.3.4 Audit Report Form ..................................................................................................................... 21

9.3.5 Corrective Action Request Form ................................................................................................ 22

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A. DOCUMENT CONTROL

A.1. Preparation, Review, Approval and Issue.

The development, review, approval and issuance of this Standard Operating Procedure will be
carried out as follows;

PREPARED BY REVIEWED BY APPROVED BY ISSUED BY

NAME Internal Audit Quality Managing Director Internal Audit

Manager Management Manager
Representative

DATE

SIGNATURE

A.2. Circulation List

This Standard Operating Procedure will be circulated as follows;

S/NO RECIPIENT
01/04 Managing Director
02/04 Quality Management Representative
03/04 Internal Audit Manager
04/04 Internal Audit Team Members

B. RESPONSIBILITY TO ENSURE THAT THE PROCEDURE IS FOLLOWED

Internal Audit Manager will ensure that this procedure is followed by all the personnel in the Internal
audit department.

C. REFERENCES
 ISO 10013, Quality Management System Documentation

 ISO 9001 Quality Management System Requirements

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1. PURPOSE
This procedure provides guidelines on how to perform various activities in Internal Audit
department so as to ensure effectiveness and efficiency of its operations.

2. SCOPE
This procedure applies to all the activities carried out in MFLC Internal Audit department only. It
describes MFLC Internal Audit department organization structure, roles and responsibilities, as
well as outlining the sequence and description of activities.

3. OBJECTIVES

3.1 Department objectives

a) To plan, establish, implement and maintain an audit programme including the frequency,
methods, responsibilities, planning requirements and reporting.

b) To define the audit criteria and scope of each audit.

c) To notify the relevant departmental managers concerning audits.

d) To review all relevant information related to assigned tasks

e) To prepare work documents necessary to carry those tasks

f) To comply with and communicate audit requirements

g) To ensure all the audit team members stay within the scope

h) collate objective evidence from the audit both for and against conformance

i) To document nonconformities

j) To report audit findings to relevant management.

k) To verify corrective actions taken in response to nonconformities

l) To retain and safeguard all documents pertaining the audit.

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3.2 Procedure objectives

a) To describe organization structure of Internal Audit department.

b) To outline the roles, responsibilities and authorities in Internal Audit department.

c) To describe the key activities of Internal Audit department.

d) To address various potential risks and opportunities in Internal Audit department.

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4. THE STRUCTURE OF ORGANISATION OF INTERNAL DEPARTMENT, ROLES &

RESPONSIBILITIES.

4.1 The Structure of Organization

Other Internal Audit

Departmental Manager
Managers

Internal Audit Team

Members

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4.2 The Roles and Responsibilities

4.2.1 The Audit Manager

The Audit manager will;-

m) plan, establish, implement and maintain an audit programme including the frequency,
methods, responsibilities, planning requirements and reporting.

n) define the audit criteria and scope of each audit.

o) notify the relevant departmental managers concerning audits.

p) lead the entire audit team and inspire cooperation among members throughout audit
process.

q) review all relevant information related to assigned tasks

r) prepare work documents necessary to carry those tasks

s) comply with and communicate audit requirements

t) ensure all the audit team members stay within the scope

u) collate objective evidence from the audit both for and against conformance

v) compare his/her notes with those of team members.

w) document nonconformities

x) report audit findings to relevant management.

y) verify corrective actions taken in response to nonconformities

z) retain and safeguard all documents pertaining the audit.

4.2.2 The audit team members

The audit team members will;-

a) review relevant information related to their assigned tasks

b) prepare work documents necessary to carry out those tasks

c) remain cooperative throughout the audit process

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d) stay within the audit scope

e) collate objective evidence from the audit both for and against nonconformance

f) document nonconformities

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5. DESCRIPTION OF THE ACTIVITIES

5.1 General
This section describes all the key activities involved in the auditing process.

5.2 Description of Activities

5.2.1 Planning and establishing audit programme.

The Audit Manager will plan and establish an audit programme, suitable to the activities of
Montine Foods Ltd. The Audit Manager will engage in discussions, managers from other
departments so as to get know and consider the crucial key processes in designing the
programme.

Frequencies of the audit of the processes will be determined by the importance of the
processes. Those processes important for the survival of the company such as product
realization processes will be audited more frequently than those which are not.

Upon planning and establishment of an audit programme, it will be implemented and

maintained.

5.2.2 The Audit Process

The following steps will be followed when conducting an audit in Montine Foods Ltd;-

5.2.2.1 Initiating the audit

The Audit manager will set the objectives, scope and criteria to be used during the audit.
Objectives will include for example: to determine extent of conformity of the organization’s
quality management system or parts of it, with the audit criteria; to evaluate the effectiveness
of implemented management system in meeting specified objectives.

The audit scope will describe extent and boundaries of the audit in terms of factors such as
physical location, organizational units, activities and processes to be audited and duration of
the audit. The audit criteria will include for example; standards, policies and procedures.

The Audit manager will contact the manager of the relevant department to be audited so as to
notify him /her of the audit and make necessary arrangements.

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5.2.2.2 Conducting a document review

The Audit manager with his/her team, before carrying out the audit, will need to review all
documents relevant to the process to be audited, so as to familiarize with the objectives, tasks,
and activities.

Documents to be reviewed will include for example; procedures, work instructions, records,
quality manual, records and forms.

5.2.2.3 Preparing for the on-site audit activities

The Audit manager will prepare a plan for the audit, showing timelines and how the audit
activities will be carried out. The Audit Manager will assign the audit team members to these
activities.

The Audit Manager with team members will prepare audit checklists which will aid to control
the depth, pace and ensure all the planned arrangements are covered.

5.2.2.4 Conducting on-site audit activities

The Audit manager will meet with relevant departmental managers to explain the audit process,
scope and methodology; clarify how audit activities will be undertaken; encourage cooperation,
honesty and openness.

The Audit manager will ensure there is effective communication among his/her team members
so as to agree on certain issues during the audit.

The Audit manager with his/her team members will collect information about the people,
processes, equipment, tools, materials and documentation. This information will be obtained
from sources such as interviews, observations, documents, records, data summaries and
reports of customer feedback.

Sampling method will be adopted since it will be impractical to interview every person.
Adequate sampling will be carried out to assure accuracy and reliability of the final audit results.

The Audit manager and team members will examine collected information against audit criteria
to come up with audit findings, then compare these audit findings with audit objectives to draw
audit conclusions.

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5.2.2.5 Reporting on the audit

The Audit manager will prepare a written report, after the audit, providing accurate record of
the audit and containing audit conclusions on issues covered in audit objectives and scope, to
be presented during the closing meeting.

This report will also include the agreed audit objectives and scope; the audit criteria;
identification of audit team members; date and place the audit conducted; audit findings;
identification of the departmental representatives; summary of audit process; distribution list
of audit report; observations/ opportunities for improvement.

The Audit manager will approve this audit report before presentation to relevant management.

5.2.2.6 Completing the audit

The audit manager will explain all the findings and evidence carefully and precisely during the
closing meeting. This meeting will be constructive and aimed at system improvement. The
Audit manager will be prepared to support and justify findings, avoid being drawn into
argument.

The Audit manager will emphasize on the relevant management to investigate and attempt to
correct the root cause of the problem to prevent recurrence.

During this closing meeting, the Audit manager will issue CARS to relevant management
representatives so as to eliminate detected nonconformity.

The Audit manager will verify the corrective action determined by relevant management and
upon agreement with it, management will implement it. The Audit manager will verify
effectiveness of corrective action and close out.

The Audit manager will retain all documented information regarding this audit process.

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6. RISK AND OPPORTUNITY MANAGEMENT

6.1 General
This section describes all potential risks and opportunities in Internal audit department, which
may have great impact on performance of its operations.

6.2 Risks and risk management

No. RISK; incident, triggered by, impact MITIGATION MEASURE

1. Poor audit programme which does not The Audit manager will engage in dialogue
consider the importance of the processes. with other departmental representatives to
This may be due to failure of Audit give their views during planning and
manager to engage other departmental establishment of audit programme.
managers during planning and
establishment of audit programme. This
will lead to those key processes not being
properly audited, thus low performance of
the process.

2. Auditing on pre-prepared samples due to The Audit Manager with team members will
ignorance of the auditor to be keen during remain alert throughout the audit process
the audit process. This will lead to and choose own samples.
inaccurate and unreliable audit results.

3. Lack of cooperation by representatives of No matter the worse the circumstances will

areas being audited due to their emotions be, the Audit manager and his/her team will
and ruddiness. This may slow down the remain calm and objective, since it was not
audit process and also lead accurate the auditee who asked them to be there.
information not being discovered.

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6.3 Opportunity management

No. OPPORTUNITY MANAGEMENT

1 Improved audit programme due to
Audit manager engaging other
departmental managers. This will
contribute good views when planning
and establishing audit programme.
The Audit Manger with his/her team members
will involve other departmental managers when
planning and establishing audit programme so
that they contribute their views.

2. Consistent effective audits due to The Audit manager will ensure all set audit
establishment of adequate SMART objectives are SMART and adequate to the key
objectives which ensure all key areas processes of management system.
of management system are audited.
This will lead to continuous
improvement of management
systems.

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7. RECORDS

7.1 General
This section outlines all records required for effective and efficient operation of the activities of
Internal audit department of Montine Foods Ltd.

7.2 Audit Programme records

Internal audit Manager will prepare audit programmes for the company by filling the form
MFL/IAD/DPT/IAP-00 2019 (see clause 9.3.2). These records will be filed according to serial
numbers in the file IAD-IAPR-01 and the file be kept in Internal audit Manager's locker.

7.3 Checklists
IAT Members will prepare audit checklists by filling the Form MFL/IAD/DPT/IAC-00 2019 (see
clause 9.3.3). These records will be filed according to serial numbers in the file IAD-IACR-01 and
the file be kept in Internal audit Manager's locker.

7.4 Audit Reports

Internal audit Manager will prepare audit reports for the company by filling the form
MFL/IAD/DPT/IAR-00 2019 (see clause 9.3.4). These records will be filed according to serial
numbers in the file IAD-IARR-01 and the file be kept in Internal audit Manager's locker.

7.5 Corrective Action Requests (CARS)

Internal audit Manager will prepare Corrective Action Requests upon completion of an audit
activity, by filling the Form MFL/IAD/DPT/CARF-00 2019 (see clause 9.3.5). These records will be
filed according to serial numbers in the file IAD-CARR-01 and the file be kept in Internal audit
Manager's locker.

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8. RECORD OF AMENDMENTS MADE TO THE PROCEDURE

Amended by Reviewed by Approved by

Name Internal Audit Manager Quality Management Managing Director

Representative

Signature

Date

DESCRIPTION OF CHANGE:

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9. APPENDICES

9.1 Acronyms
 DPT- Department

 IAD- Internal Audit Department

 IAM- Internal Audit Manager

 MD- Managing Director

 MFLC- Montine Foods Limited Company

 QMR- Quality Management Representative

 SOP- Standard Operating Procedure

9.2 Terms and definitions

TERM DEFINITION

AUDIT Systematic, independent and documented process of obtaining

audit evidence and evaluating it objectively to determine
extent to which audit criteria has been fulfilled.

AUDIT CRITERIA Set of policies, standards, procedures or any other information

used as reference.

AUDIT CONCLUSION Outcome of an audit provided by audit team after

consideration of the audit objectives and audit findings.

AUDIT FINDINGS Results of evaluation of collected audit evidence against audit

criteria.

AUDIT PLAN Description of the activities and arrangements for an audit.

AUDIT PROGRAMME Set of one or more audits planned for a specific time frame and
directed towards specific purpose.

AUDIT SCOPE Extent and boundaries of an audit.

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CORRECTION Action to eliminate detected nonconformity.

CORRECTIVE ACTION Action to eliminate cause of detected nonconformity or other

undesirable situation.

CORRECTIVE ACTION A form used by some auditing organizations to request that

REQUEST (CAR) action be taken to correct a nonconformance identified during
an audit.

INFORMATION Meaningful data.

INTERNAL AUDIT Audit conducted by or on behalf of the organization itself for

management review and other internal purposes and may
form basis for organization's self-declaration of conformity.

NONCONFORMITY Non-fulfilment of a requirement.

OBJECTIVE EVIDENCE Data supporting existence or verity of something.

RECORD Document stating results achieved or providing evidence of

activities performed.

RISK Effect of uncertainty on objectives.

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9.3 Forms

9.3.1 General
This section outlines all the forms required to be filled for the purpose of retaining the records.

9.3.2 Audit Programme Form (APF)

MONTINE FOODS LIMITED INTERNAL AUDIT DEPARTMENT S/No: ......

INTERNAL AUDIT PROGRAMME Ref: MFL/IAD/DPT/IAPF-00 2019

Rev No: 00 Rev Date: 01/04/19

PREPARED BY REVIEVIED BY APPROVED BY

NAME: IAM QMR MD

DATE: 01/04/19 01/04/19 01/04/19

SIGN: .......................... ........................... .......................

AUDIT KEY AUDIT PLAN

Audit scheduled

Audit completed and satisfactory

Audit completed and unsatisfactory

Corrective action follow up audit date

Corrective action follow up audit completed and satisfactory

DEPARTMENT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Top management

Human resource

Finance

Production

Sales

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Marketing

Internal audit

Procurement

Security

9.3.3 Checklist Form

MONTINE FOODS LIMITED INTERNAL AUDIT DEPARTMENT S/No: ..........

INTERNAL AUDIT CHECKLIST Ref: MFL/IAD/DPT/IAC-00 2019 Sheet No: ...OF: .....

Revision NO: 00 Rev Date: 01/04/19

PREPARED BY REVIEWED BY APPROVED BY

NAME: IAM QMR MD

DATE: 01/04/19 01/04/19 01/04/19

SIGN: ……………… ………………… ……………………

Item Requirement Activity compliance Comments

No. (YES/ NO/ Not
Applicable)

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9.3.4 Audit Report Form (ARF)

MONTINE FOODS LIMITED INTERNAL AUDIT DEPARTMENT S/No: .........

INTERNAL AUDIT REPORT FORM Ref: MFL/IAD/DPT/IARF-00 2019

Auditor's Name: Audit Report Number:

Departmental Representative: Date of Audit:

Quality function/process audited: Previous audit date and Results:

SUMMARY AUDIT:

Signed.........................(Auditor) Date:........................

Signed:.........................(Dept. Rep) Date:........................

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9.3.5 Corrective Action Request Form (CARF)

MONTINE FOODS LIMITED INTERNAL AUDIT DEPARTMENT S/No: ..........

CORRECTIVE ACTION REQUEST FORM Ref: MFL/IAD/DPT/CARF-00 2019

Audit No: …………………………….. CAR No: ………..OF: ……………

Auditor: ……………………….. Audit date: ……………………..

Dept Rep: …………………………………….

Procedure No: …………………………. Area/Dept/Function: ………………………………..

Issue: …………………………………

Details of Nonconformance:

Signed: Signed:

Dept Rep: Auditor:

Corrective Action taken to prevent recurrence:

Signed:

Dept Rep: Date:

Re-audit Results:

Signed:

Auditor: Date:

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