The primary purpose of issuing a preliminary communication to management of the area under review is to help them develop more responsive and timely action plans. Preliminary communications, such as interim reports or discussions, inform management about the audit's progress, preliminary findings, and potential issues. This early communication allows management to begin addressing identified issues before the final report, leading to more timely and effective corrective actions. It also fosters collaboration and ensures management is engaged in the remediation process from the outset.
The IIA's International Standards for the Professional Practice of Internal Auditing, Standard 2410.A1 - Communication Criteria.

Year-end inventory valuation should include all goods owned by the company, regardless of their location.
This includes goods for sale on consignment at a consignment shop, as these items remain the property of the company until sold. Goods sold FOB shipping point and goods purchased FOB destination that have not yet been received are not included, as ownership has transferred or not yet been acquired respectively. Goods on consignment that the company is trying to sell for others are also excluded because the company does not own them

For compliance engagements, particularly those related to critical processes such as cash disbursements, it is important to distribute the final audit report to individuals with oversight and decision-making responsibilities. The accounts payable manager oversees the process, the chief financial officer (CFO) has overall financial oversight, and the audit committee provides governance and oversight of the audit function.
This ensures that the report is reviewed by those with the authority to implement changes and address any issues identified. References:
* IIA Standards - 2440: Disseminating Results
* IIA Practice Advisory - 2440-1: Disseminating Results

A cause-based recommendation aims to address the root cause of an issue to prevent its recurrence. By recommending the removal of inappropriate user access, the audit report is identifying the underlying problem (the granting of inappropriate access) and suggesting a solution that will help prevent this issue from happening again. This type of recommendation is focused on mitigating risks by addressing their causes, thereby strengthening the control environment.
The Institute of Internal Auditors (IIA), Practice Guide on Writing Audit Reports
"Internal Auditing: Assurance and Advisory Services" by Urton L. Anderson et al.

* Independence Requirement: The IIA's mandatory guidance emphasizes the importance of the CAE's independence to ensure unbiased internal audit activities.
* Conflict of Interest: Seeking senior management's recommendation for the CAE's salary adjustment can create a conflict of interest and potentially compromise the CAE's independence.
* Best Practices: To maintain independence, the CAE's compensation should be determined by the board without influence from senior management.
* Standard Compliance: According to the IIA's Attribute Standard 1110 - Organizational Independence, the CAE must report to a level within the organization that allows the internal audit activity to fulfill its responsibilities.
References:
IIA Standard 1110 - Organizational Independence .