uality control is critical to a firm of auditors and to the accountancy profession as a whole. The benefits of high quality work include the reduction of the risk of the firm being sued for negligence. Required: (a) Explain the responsibilities of an audit firm's management for the quality of audit engagements undertaken by the firm. List out the six elements of a system of quality control as set out in the Hong Kong Standards on Quality Control. (9 marks) (b) Discuss the meaning of Practice Review as practiced by the Hong (5 marks) Kong Institute of Certified Public Accountants. (c) If the CPA firm's quality control is not adequate, auditors may (8 marks] encounter legal liabilities. Auditors' liability to third parties for negligence is by far the most complicated area on the topic of auditors' liabilities. According to the current trend of thinking, what are the essential elements in order for a case to be established? Discuss. (d) Discuss the auditor's responsibility towards the risks of fraud in financial statements. (8 mark