Final answer:
The value of audit risk when it is set at 5 depends on the context. Generally, it is a measure of the likelihood of material misstatements in audited financial statements.
Step-by-step explanation:
The value of audit risk when it is set at 5 depends on the context. Generally, audit risk is a measure of the likelihood that the financial statements audited by an external auditor may contain material misstatements. It consists of three components: inherent risk, control risk, and detection risk.
If audit risk is set at 5, it could refer to a percentage value (5%) representing the auditor's acceptable level of risk. In this case, the answer would be option 1) 5. However, without further context, it is not possible to determine the specific value of audit risk.