Short answer: Yes.
Long answer: If there is a component included in the financial statements then Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) found in AU-C Section 600 applies to your audit.
The simple illustration of a component is a consolidated subsidiary. Other examples include a division, geographical location, or subunit of a governmental agency.
So, you can’t dismiss group audits just because you are the only auditor on the engagement.
More detail from the Journal of Accountancy – The scoop on group audits: You may have them, even though you think you don’t.
The article quotes a section of the Technical Practice Aids to illustrate how this affects an audit with only one audit team. Section 8800.24 says:
Inquiry—Company X consolidates the operations of Entity A. The same group engagement team that audits Company X also audits Entity A. Because only one engagement team is involved, does AU-C Section 600 apply? If so, what does AU-C Section 600 require that is not already covered by other auditing standards?
Reply—AU-C Section 600 applies to all audits of group financial statements, which are financial statements that contain more than one component. In the circumstances when the same engagement team audits all components of the group, the considerations addressed in AU-C Section 600 that relate to component auditors are not relevant. However, considerations addressed in AU-C Section 600, such as understanding the components; identifying components that are significant due to individual financial significance and the significant risk of material misstatement; determining component materiality; understanding the consolidation process; and addressing the risks, including aggregation risk, of material misstatement in the group financial statements are relevant in all group audits.
[Issue Date: February 2013.]
A very condensed summary:
Previously, if you had a subsidiary that held 5% or 20% of the total economic activity, you would likely roll everything about that subsidiary into the overall audit in terms of understanding risks, assessing & testing internal controls, and further audit procedures.
Now, with AU-C 600, you need to consider whether that subsidiary (or any other component) would point towards separate work on the component for any of your audit procedures.
The article using accounts receivable confirmation as an example. If the component’s a/r has substantially different risks or is handled by a separate accounting system, you might want to pull different samples with separate calculations of sample sizes.
This post won’t go into more detail. Check out the above article for a longer explanation. Check out AU-C 600 for the actual text.