Washington

A KEY accounting safeguard intended to protect US investors who buy shares of Chinese companies is close to unravelling. Last month, a final agreement that would have allowed a US regulator to examine the audits of Chinese companies listed on American stock exchanges fell through, according to two people with knowledge of the matter.

The failed negotiations are a setback for the Public Company Accounting Oversight Board, a Washington-based watchdog that has sought access to Chinese audits for years as dozens of companies such as JD.com and Alibaba Group Holding raised billions of dollars from US investors.