John and Caroline, two audit staff associates assigned to the audit of King Enterprises are discussing audit risk. As newly-hired employees, both John and Caroline are keen to understand more about this area and how it pertains to their jobs with the firm. Which of the following statements most accurately describes audit risk? Audit risk is best thought of as the risk that the external auditors do not manage to eliminate inherent risk as part of the audit. Audit risk can be best thought of as the risk that any misstatement contained in the financial statements is detected and corrected by the auditors. Audit risk is a subset of the risk of material misstatement, and is set jointly by the auditors and top management. Audit risk is most appropriately thought of as the risk that the auditor renders a clean opinion on financial statements which are materially misstated