This paper provides an analysis of the role of auditors and their legal liability. It discusses the increase in litigations and liabilities faced by the audit profession and its impact on the industry. The paper also explores recommendations for reducing litigation and penalty rates. The case of Royal Bank of Scotland vs. Bannerman Johnston MacLay is examined to understand key events and issues related to auditors' legal liability. Overall, the paper highlights the importance of auditors' responsibilities and the need for effective auditing strategies.