Define audit risk and materiality. How are these concepts reflected in the auditor\'s report?

Materiality is defined as "the magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement" (AU 320, PCAOB AS No. 11). Audit risk is defined as the risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated (AU 320, PCAOB AS No. 12).
The concept of materiality is reflected in the wording of the auditor's standard audit report through the phrase "the financial statements present fairly in all material respects." This is the manner in which the auditor communicates the notion of materiality to the users of the auditor's report. The auditor's standard report states that the audit provides only reasonable assurance that the financial statements do not contain material misstatements. The term "reasonable assurance" implies that there is some risk that a material misstatement could be present in the financial statements and the auditor will fail to detect it.