The audit firm, Wong & Associates was expanding rapidly. Consequently, it hired several junior accountants, including a man named Small. The partners of the firm eventually became dissatisfied with Smalls productivity and warned him they would be forced to discharge him unless his output increased significantly. At that time, Small was engaged in audits of several clients. He decided that to avoid being fired, he would reduce or omit some of the standard auditing procedures listed in audit programs prepared by the partners. One of the audit firms clients, Nest Bhd, was in serious financial difficulty and had adjusted several of the accounts being audited by Small to appear financially sound. Small prepared fictitious audit documentation in his home at night to support purported completion of auditing procedures assigned to him, although he in fact did not examine the adjusting entries. The audit firm rendered an unmodified opinion on Nest Bhds financial statements, which were grossly misstated. Several creditors, relying on the audited financial statements, subsequently extended large sums of money to Nest Bhd. a) Explain if the auditors will be held liable to the creditors under the circumstances described. State your reasons clearly. (15 marks) b) Explain actions that the auditors could have taken to prevent such a legal action from arising.