You have recently joined medium-sized accounting firm, Nexturn Australia (Nexturn), as an audit graduate. You have just been assigned to the audit of Telsar Pty Ltd (Telsar) for the financial year ending June 2020. Telsar is a hardware and automotive manufacturer and retailer.

The audit partner in charge of the Telsar engagement, John Bean, was excited to learn that you have had some experience with audit data analytics in your university course. He is keen to see the firm more fully embrace the use of technology in auditing clients. He has requested that you prepare a briefing on the use of data analytics for him to take to the firm's leadership team. He has also obtained a trial licence for Tableau for the firm and asked you to have a go at developing a dashboard that can demonstrate how data visualisation may be useful on audit engagements.

You are in the process of auditing Telsar's purchases and trade payables and have obtained the following information:

• Materials are purchased from both local suppliers and overseas suppliers, notably in Malaysia and Vietnam.
• Depending on the type of materials purchased, it is often delivered to a range of locations. Telsar has manufacturing plants in NSW and VIC and several warehouses in both states.
• Trade payables are all processed through the central accounts department in Sydney.
• The accounts supervisor, who has been with the company for ten years, went on maternity leave in December 2019. This position was filled by a new hire on a temporary contract in February 2020.
• Based on your preliminary discussions with Telsar staff, the information on the company's purchases and payments processes includes the following:
• When specific inventory is required or reorder quantities are reached, the warehouse staff prepare a 'Materials Requisition' form outlining the type and quantity of raw materials or parts required and send it to a purchasing officer. The purchasing officer then issues a purchase order and sends this to the relevant supplier and copies to the accounts department. If the purchase order exceeds $5,000, it requires approval by the purchasing manager.
• When the goods are received, the warehouse counts the incoming stock and records the total quantity received on the system, creating a goods received record. If there is a discrepancy between quantity ordered and the quantity received, it is a purchasing officer's responsibility to follow up with the supplier and inform the accounts department of the outcome.
• Telsar's trade payables system allows for suppliers to be set up for trading terms (credit and discount), payee details and general ledger account coding. It is the accounts supervisor's responsibility to add and modify supplier account details.
• Any payment to a single creditor exceeding $3,000 requires approval from the purchasing manager, who checks the supporting documentation, prior to being included in the payment run. The electronic payment file is then uploaded to the company's online banking system to be paid out.

1.(a)Outlinehow data analytics can be used in the financial report audit and summarise the key benefits and challenges in adopting the use of data analytics on audit engagements.

(max 34 page)[5 marks]