Chinese regulators are considering a proposal to allow their US counterparts to inspect audit working papers of some Chinese companies that do not collect sensitive data, according to Reuters.

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There appears to be a significant development in US-China cooperation on audit regulation of US-listed Chinese companies.

Chinese regulators have asked a number of companies, including Alibaba, Baidu and JD.com, to prepare for more audit disclosures, Reuters reported today, citing people familiar with the matter.

This comes as China's regulators are considering a proposal to allow their US counterparts to inspect audit working papers of some Chinese companies that don't collect sensitive data, two of the sources said.

As part of the move, the China Securities Regulatory Commission (CSRC) and other regulators summoned top Internet companies, including Baidu and JD.com, earlier this month, the report said.

They were asked to prepare audit filings for fiscal 2021 and to keep in mind US regulators' demands for more disclosure, the report said, citing the sources.

If they are uncertain about anything throughout the process, the companies should better the advice of Chinese regulators, according to the report.

Last week, local media outlet Cailian cited sources close to Chinese regulators as saying that top officials from the US and Chinese securities regulators held working-level talks to exchange views on possible paths to advance cooperation on auditing and regulation.

The two sides plan to further strengthen communication and reach cooperation arrangements as soon as possible within a framework that is consistent with their respective laws, according to the report, which did not disclose further details.

The development comes after Chinese Vice Premier Liu He chaired a meeting of the State Council Financial Stability and Development Committee (FSDC) on March 16 to express support for capital markets.

The meeting, China's top financial meeting, addressed regulatory cooperation regarding Chinese companies listed in the US, according to a report by Xinhua News Agency.

Chinese and US regulators have maintained good communication and have made positive progress and are working to form concrete cooperation programs, the report said, adding that the Chinese government continues to support all types of companies going public outside of China.

China voices support for capital markets after recent turmoil