By P.R. Venkat


JD.com Inc. said it has been identified by the U.S. Securities and Exchange Commission under the Holding Foreign Companies Accountable Act, which requires companies to have auditors who can be inspected by the U.S. Public Company Accounting Oversight Board.

The SEC has determined that JD.com used an auditor whose working paper can't be inspected or investigated completely by the U.S. PCAOB for it to issue the audit opinion on the company's financial statements for the fiscal year ended Dec.31, 2021, the e-commerce giant said Thursday.

U.S. regulators are seeking to prohibit trading in securities of companies whose auditors can't be inspected by the PCAOB for three years in a row.

JD.com has been caught in an accounting tussle between U.S. and Chinese regulators that has spanned several years.

The U.S. PCAOB, which inspects non-U.S. audit firms in around 40 other jurisdictions, can't review audit documents in China without approval from Chinese authorities.

The Chinese government for years has resisted inspections of Chinese-company audits. Accounting scandals at Chinese companies have drawn attention to the gap in audit inspections.

"JD.com has been actively exploring possible solutions. The company will continue to comply with applicable laws and regulations in both China and the United States, and strive to maintain its listing status on both Nasdaq and the Hong Kong Stock Exchange," the company said.

According to the U.S. SEC's website, other companies that have been identified under the Holding Foreign Companies Accountable Act include Chinese electric maker NIO Inc., PetroChina Co. and NetEase Inc.


Write to P.R. Venkat at venkat.pr@wsj.com


(END) Dow Jones Newswires

05-05-22 0120ET