Final answer:
Directors are legally liable for the mismanagement of the firm and misuse of funds as they carry the responsibility for corporate governance and oversight.
Step-by-step explanation:
The individuals who are legally liable for the mismanagement of the firm or for any misuse of funds are the directors. The board of directors, which is elected by the shareholders, carries the responsibility for corporate governance and oversight for top executives. Auditing firms and outside investors, including large shareholders, also play roles in corporate governance, but it is the directors who are legally accountable for the actions and financial health of the company.