US to probe audits of Alibaba, JD.com and other Chinese firms, Reuters reports

By Julie Zhu

HONG KONG (Reuters) – U.S. regulators have targeted e-commerce companies. Alibaba (NYSE: ) and JD.com (NASDAQ: ) are among Chinese companies listed in the U.S. for audit scrutiny starting next month, people familiar with the matter said.

Tech companies that own KFC, Taco Bell and Pizza Hut restaurants in China along with China are reportedly under scrutiny in the first round of audits by the US audit watchdog in Hong Kong. Company Accounting Oversight (PCAOB), sources told Reuters.

Alibaba’s respective accounting firms JD.com and Yum China – PwC, Deloitte and KPMG – were also notified of the study.

Alibaba, JD.com, Yum China and the China Securities Regulation Commission did not respond to requests for comment.

Spokespeople for PwC and Deloitte said it was the firms’ policy not to comment on client matters. KPMG declined to comment on the matter.

A spokeswoman for the PCAOB said the board does not comment on audits.

The PCAOB said Friday, without naming the selected companies, that it expects its staff to arrive in Hong Kong in mid-September for inspections.

The regulator, which oversees audits of US-listed companies, said it selects companies based on risk factors such as size and industry, and that no company can expect special treatment.

(Additional reporting by Katanga Johnson)