Audit risk is the risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated.

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Audit risk is defined as the risk that an auditor expresses an inappropriate audit opinion on financial statements that are materially misstated, which means that the financial statements contain significant errors or omissions that may affect the decisions of users of the financial statements. The level of audit risk depends on several factors such as the nature of the client's business, the complexity of the accounting and financial reporting systems, and the extent of the auditor's reliance on internal controls and other audit procedures to detect and prevent material misstatements. Therefore, it is important for auditors to carefully assess and manage audit risk to ensure that their audit opinions are reliable and credible.

Audit Risk Is the Risk That the Auditor Expresses an Inappropriate