when an auditor sets the risk high, what does this mean? Solution Audit risk is the that the auditor will not discern errors or international miscalculations during the process of reviewing the financial statements of a company or an individual. There are 3 types of audit risks 1. Inherent Risk- It means that the financial statement is susceptible to a material misstatement. 2. Control Risk-It means one or more misstatement might not be detected or prevented on a timely basis by the internal control system of the comapany. 3. Detection Risk-It is the risk that an audit might not be capable of detecting a material misstatement. When the auditors sets the risk high it means that the financial statements are full of material misstatement that could severely affect the organisation if not corrected. It means that the auditor needs to carry out more detection procedures to be convincingly assured about the financial statements being free from material misstatements. .