US, China reach audit deal allowing regulators to vet accounting firms

US regulators long demanded access to audit papers of Chinese companies listed in the US, but Beijing has been reluctant to let overseas regulators inspect accounting firms, citing security concerns.

Beijing and Washington took a major step on Friday towards ending a dispute that threatened to boot Chinese companies, including Alibaba, from US stock exchanges, signing a pact to allow US regulators vet accounting firms in China and Hong Kong.

US regulators long demanded access to audit papers of Chinese companies listed in the United States, but Beijing has been reluctant to let overseas regulators inspect accounting firms, citing security concerns.

The pact marks a major thaw in US-China relations and come as a huge relief for hundreds of Chinese companies and investors who have invested billions of dollars in the firms