The auditor?s liability is subject to various regulations throughout the world. In Austria, the auditor?s liability is limited, whereas in Anglo-Saxon countries this could have a devastating effect for the auditor. Due to this fact, this master?s thesis focuses on the topic of ?Financial Statement Insurance as an alternative to actual systems of auditor liability? including the question, whether an implementation of FSI would result in an improvement over the present liability system. Initially, however, the thesis deals with problem areas in the field of auditing. After all, FSI is supposed to lead to an improvement regarding not only the liability situation, but also the problem areas by means of changing the principal-agent relation. Before drawing a conclusion from the possible introduction of FSI, though, it is necessary to examine the current liability system as well as the magnitude of its consequences for the auditor in the event of liability. The present thesis analyses both the legal regulations and the liability situation of auditing in the United States as well as in Austria. In addition to that, the model of Joshua Ronen is presented together with an evaluation of its advantages and a critical appraisal concerning its implementation. From this critical examination it appears that Ronen?s model raises administrative questions and poses further difficulties as it is applied. Moreover, long-standing problems, such as the question of liability, persist, since a change to auditor liability rules will only take place in case of an insurance provided by a FSI insurance company. In case of no insurance, however, the current liability situation remains unchanged. Finally, this thesis is rounded off with the presentation of alternative proposals with regard to the change of liability rules, on the one hand, and the enhancement of auditor independence, on the other hand.