Final answer:
Audit risk is the risk that an auditor issues an incorrect opinion on financial statements. In the given scenario, an auditor's incorrect assessment of pension obligations represents an audit risk, as the mistake could lead to an erroneous conclusion about the company's financial well-being.
Step-by-step explanation:
The situation described in the question where an auditor mistakenly concludes that a company is financially sound based on an incorrect appraisal of the company's pension obligations best exemplifies audit risk. Audit risk refers to the risk that the auditor may issue an incorrect opinion on the financial statements. It is the risk of material misstatement existing in the financial statements not being detected by the auditor. Therefore, in this case, the auditor's failure to correctly evaluate the pension obligations has led to a mistaken conclusion about the company's financial health, thus representing audit risk.