Audit Risk

Companies go through a lot of trouble to make sure their financial statements are correct. Firms employ teams of accountants, who diligently keep records and make sure the reporting accurately reflects the company's financials. Beyond this, the company will engage the services of an outside auditor to double check the numbers and add their endorsement that everything looks right.
Even with all this, there's a chance - perhaps very small, but still - that the numbers are wrong in some substantial way. This lingering risk is known as the "audit risk." Basically, the term refers to the possibility that the company's auditor is wrong and at some point down the line, the firm will be forced to restate its financial statements to correct the error.
Audit risk comes in three main varieties: inherent risk, control risk and detection risk.
Inherent risk is basically the risks that arise from the type of business the company conducts. A complicated business or one involving a large number of cash transactions make it harder to track the finances accurately, raising the difficulty to audit the company effectively.
Control risk relates to the strength of the company's internal accounting structure. If it is weak, it makes it more likely that mistakes exist, which might not get caught by the auditor.
Detection risk relates to the auditor's procedures. If these are weak, the auditor might not be able to catch a mistake. (And that is bad.)