Alibaba and JD.com Stocks Are Rising. Let the U.S. Audits Begin.

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Shares of

Alibaba

and

JD.com

were rising Wednesday following a report that the Chinese e-commerce giants are among the first companies selected for inspection by U.S. auditors following a major bilateral agreement on financial transparency.

Alibaba

(ticker: BABA),

JD.com

(JD), and

Yum China

(YUMC)—which owns KFC, Taco Bell, and Pizza Hut in the country—are among the first Chinese companies selected by U.S. regulators for audit inspection, Reuters reported, citing anonymous sources.

Beijing and Washington reached a landmark deal last Friday in a move that should end a long-standing dispute over accounting rules that apply to U.S.-listed Chinese companies, and avoid their mass delisting from U.S. stock exchanges.

Under the agreement, U.S. Public Company Accounting Oversight Board (PCAOB) inspectors will travel to the region to review the audits of Chinese and Hong Kong companies. 

Alibaba, JD.com, and

Yum China

have been notified that they are among the first batch to face U.S. inspectors, according to the report, which also said that PwC, Deloitte, and KPMG—their three respective accounting firms—have also been notified.

American depositary receipts of Alibaba jumped 2% in premarket trading, with JD.com stock more than 2% higher. Yum China Holdings shares gained 1%.

Write to Jack Denton at [email protected]