The outer ear
The outer ear consists of the pinna (auricle) and the auditory canal.
The purpose of the outer ear is to collect sound waves (which are simply differences in air pressure over time) from the surrounding environment and channel them through towards the ear drum.
It also plays an important role in the sound localisation process. It is estimated that the outer ear amplifies the sound level at the ear drum 6 fold.
The middle ear
The middle ear is an air-filled cavity that is separated from the outer ear by the tympanic membrane (ear drum). Along with the ear drum, it is also the site of the ossicular chain–a bridge like structure comprised of the three smallest bones in the human body–the malleus, incus and stapes–which transmit vibrations from the ear drum through to the oval window of the cochlea (organ of hearing). When sound waves reach the ear drum, it leads to the drum vibrating according to the pattern of the movement of the impacting wave.
Thus, the ear drum vibrates slowly in response to low frequencies and rapidly in response to high frequencies. The structure of the middle ear is such that it is designed to act as a ‘lever’, and therefore is able to amplify the sound wave vibrations impacting upon the ear drum through to the inner ear 20-fold. The middle ear also consists of the eustachian tube, which allows for the pressure on both sides of the ear drum to be equalised for healthy transmission of sound vibration. It opens up at the rear end of the throat.

Hearing
When the ossicular chain of the middle ear conducts sounds to the oval window (a membrane located on the cochlea, connecting it to the middle ear), the fluids of the cochlea begin to move, thus stimulating the hair cells inside.
These hair cells send electrical impulses through the auditory nerve to the brain where they will be interpreted as sound.

Balance
Angular and linear accelerations of the head and body cause displacement of the fluids within the vestibular organs. This in turn stimulates their hair cells, which subsequently transmit impulses through the vestibular nerve to the brain which will then determine the relative positions of the head and body in relation to the environment, and respond by ensuring the necessary adjustments are made by the eyes and body to ensure balance is maintained*