Answer (C) is correct. SAS 47 (AU 312), Audit Risk and Materiality in Conducting an Audit, defines audit risk as the risk that the external auditor may unknowingly fail to modify his or her opinion on financial statements that are materially misstated. Its elements are control risk, inherent risk, and detection risk. For internal auditing, the overall audit risk extends not only to financial statements but also to unwitting failure to uncover material errors or weaknesses in the operations audited. There may be several different reasons for the failure, and these may be in risk categories such as sampling risk, detection risk, or control risk.