Could this put my company at risk of being audited?

Yes, absolutely. The business should plan for it. For a business to issue a W-2 and a 1099 to the same recipient does raise audit risk for the business, especially if they are doing so to many recipients. If the business decides all their independent contractors are actually employees and will switch their status prospectively, the IRS is liable to come back and assess penalties for the years of the business's incorrect filings within its statute of limitations. However, this is the business's problem. There are cases in which a business can correctly issue a W-2 and 1099 to the same recipient, and while it would raise audit risk, the IRS would ultimately concur with the business's position. This is not such a circumstance, since the business is basically admitting it had been filing incorrectly. The business needs to hire a CPA or tax attorney to help mitigate its risk and potentially limit its exposure.

For you, the business may over-withhold from your W-2 to make up for under-withholding while you were classified as an independent contractor, but this is unlikely. The business will probably start prospectively withholding correctly on your W-2 based upon the W-4 you fill out. Since they were not withholding on you while you were a 1099 contractor, you will be in a similar position as you had been previously for the portion of the year in which you were in an independent contractor. You can choose to have your employer over-withhold on you if you please, but since we are already well into the 4th quarter for estimates, it wouldn't have much of an effect on the potential for any underpayment penalties whether you pay now or in March-April.