The risk that the auditor expresses an inappropriate audit opinion on financial statements that are materially misstated.
Formal
Audit risk is the risk that the auditor gives an unmodified/unqualified audit opinion when the financial report is materially misstated
Simpler English:
Audit risk = the risk that the auditor says the financial statements are “true and fair” when actually there is a big (material) error inside.
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