10.4 Managing Audit Rules, the Expense Audit and Reimbursement

Oracle Fusion Cloud Financials Payables and Expenses 2026 Implementation Professional Exam

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1 Chapter 1: Exam Overview, Enterprise Structures & Security

1.1 Exam Facts, Hands-On Format & How to Use This Guide 1.2 Enterprise and Financial Reporting Structures & the Data Security Model 1.3 Business Units and Reference Data Sets

2 Chapter 2: Master Data, Taxes & Cash Management Setup

2.1 Supplier Master Data: Profile, Addresses, Sites and Site Assignments 2.2 Supplier Controls: Registration, Income Tax Details, Site Holds and Third-Party Payments 2.3 Bank Account Master Data: Banks, Branches, Internal Accounts and Security 2.4 Transaction Tax Setup for Procure-to-Pay 2.5 Configuring Cash Management for Payables: Statements, Reconciliation Rules and Clearing

3 Chapter 3: Supplier Invoices — Options, Entry & Matching

3.1 Invoice Options and Common Options for Payables and Procurement 3.2 Supplier Invoice Processing: Invoice Types, Components and Distribution Sets 3.3 Matching Invoices to Purchase Orders, Receipts and Consumption Advice

4 Chapter 4: Supplier Invoices — Tolerances, Holds & Approvals

4.1 Invoice Validation, Invoice Tolerances, Holds and Releases 4.2 Invoice Approval Rules: Workflow, Spreadsheet Rules and Approval Actions 4.3 Prepayments, Recurring Invoices, Credit and Debit Memos

5 Chapter 5: Invoice Automation, AI & Subledger Accounting

5.1 AI in the Supplier Invoices Process: IDR, Document IO, the Payables Agent and Intelligent Defaulting 5.2 Importing Invoices: File-Based Data Import, Import Payables Invoices and Corrections 5.3 Setting Up Subledger Accounting for Payables

6 Chapter 6: Payments — Configuration

6.1 Payment Options, Payment Methods, Defaulting Rules and Payment Terms 6.2 Payment Process Profiles, Formats, Payment Systems and Transmission 6.3 Disbursement System Options, Payment Security and Payment Approval Rules

7 Chapter 7: Payments — Processing, Withholding, Accounting & AI

7.1 The Payment Process and Payment Process Request Templates 7.2 Completing Payments: Printing, Electronic Confirmation, Bank Acknowledgments, Single Payments, Stops and Voids 7.3 Withholding Tax Setup and US 1099 Reporting 7.4 Payment Accounting: Issue and Clearing, Gains and Losses, Discounts, Cross-Currency Payments and Bills Payable 7.5 AI in the Payments Process: the Payments Agent, Discount Intelligence, Virtual Cards and Fraud Controls

8 Chapter 8: Accounts Payable Balances & Period Close

8.1 Payables Calendars and Payables Accounting Period Statuses 8.2 Payables to General Ledger Reconciliation 8.3 The Payables Period Close Process: Unaccounted Transactions, Sweep and Close Exceptions 8.4 Balancing, Accruals and Year-End Activities in Payables 8.5 Accounts Payable Analysis and Reporting: Landing Pages, Dashboards, Aging Periods and Key Reports

9 Chapter 9: Expenses — Processing, Setup & Policies

9.1 Expenses Processing: From Expense Entry to Reimbursement 9.2 Expenses System Options, Expense Report Templates and Expense Types 9.3 Managing Expense Policies: Categories, Rate Determinants and Enforcement 9.4 Mileage and Per Diem Policies, Oracle Maps and Cumulative Mileage 9.5 Conversion Rate Policies, Receipt Requirements and Payment Hold Rules

10 Chapter 10: Expenses — Approvals, Cards, Advances, Audit & Travel

10.1 Configuring Expense Approval Rules in the BPM Worklist 10.2 Configuring Corporate Card Programs: Payment Options, Transaction Files and Accounting 10.3 Managing Cash Advances: Policies, Approval, Accounting and Application 10.4 Managing Audit Rules, the Expense Audit and Reimbursement 10.5 Configuring Travel Integration: Travel Partners, Itineraries and Trip Expense Reports

11 Chapter 11: AI, Mobile, Automation & Redwood

11.1 AI, Mobile and Automation in Expenses: Expense Assistant, Email Receipts and Touchless Expenses 11.2 Enabling Redwood Capabilities and Their Impact on Existing Configurations

10.4 Managing Audit Rules, the Expense Audit and Reimbursement

Key Takeaways Explain This Topic AI

Audit setup creates audit selection, audit list, expense template and type, and receipt and notification rules, then assigns them to business units; without selection rules, reports are approved automatically.

Selection rules include a random percentage (100 audits everything), amount over a threshold, required receipts, missing imaged receipts, policy violations, audit list members, aged expenses, status, keywords and commute variance.

Anomaly rules for top spenders, top policy violators and repeat violations need the Generate Summary Metrics for Expenses process to be scheduled.

Each audit reason scores 0 (Null), 10 (Low), 40 (Medium) or 120 (High); a report totaling under 40 is Low risk, 40 to under 120 Medium, and 120 or more High.

Short Pay with an audit issue splits a report into an approved report that is paid and a short-paid report returned to the employee.

Last updated: October 2026

The published objective is Manage Audit Rules . Auditing lets the company check compliance without reviewing every report . Rules choose the reports, and auditors work them in the Auditing work area.

Setting up expense auditing

Oracle's steps, the first four in any order:

Audit selection rules : which reports are audited.

Audit list rules : which employees go on the audit list.

Expense template and type rules : audits based on template, type and amounts.

Receipt and notification rules : receipts, overdue tracking and payment holds (section 9.5).

Assign the rules to business units on Manage Expense Report Audit and Receipt Rule Assignments .

You need at least one selection, audit list, or template and type rule assigned to a business unit, or Expenses can't audit its reports. With no audit selection rules, all reports are approved automatically.

Selection rules can carry audit types : codes printed on the report cover sheet, such as Paperless Audit . They help sort receipt packages into automatic approval, original receipts, imaged receipts and no-receipts-required audits.

Audit selection rules

Rule Notes

Audit a percentage of all reports Random selection. 100 audits everything. Reports not caught by an explicit rule are the candidates.

Amount greater than In a ledger currency, converted at the GL daily rate on the submission date. With no rate, the rule is ignored.

• Required receipts Any line needing a receipt, whether provided or not
• Missing imaged receipts
• Policy violations Pairs with section 9.3

Individuals on the audit list Needs an audit list rule assigned to the same business unit. Otherwise members can only be added manually.

• Aged expenses For example, with 7 days and an October 15 submission, items before October 8 trigger audit
• Individuals with a specific status For example inactive or on leave

Keywords Lookup ORA_EXM_KEYWORD_AUDIT or your own per business unit. A score percentage of 100 means exact matches, and lower values accept similar words.

• Commute distance variance Mileage commute deductions that look wrong
• Anomaly rules (preconfigured, editable)

Top spenders in a period, for example the 10 top spenders of the past 6 months.

Top policy violators in a period.

The same policy violation more than N times in a period. The next report is audited.

Public sector attendees .

Duplicate expenses , on amount, date, currency, type and merchant.

Same attendees on the same day .

Amounts just below the missing receipt threshold .

The top-spender, top-violator and repeat-violation rules need the Generate Summary Metrics for Expenses process scheduled , so their statistics stay current.

The audit list and template rules

Audit list rules add employees automatically when they break:

Maximum number of days to wait for original receipt package . Auditors must then record receipt package dates.

Allowable total monthly amount of all reports.

Allowable number of policy violations per month .

Allowable number of reports per month .

Each rule has a Number of Days an Individual Remains on the Audit List . A new violation restarts the count. Other points:

There is one audit list across all business units .

You can add employees manually, with reasons such as amounts near threshold .

Auditors can add or remove employees while auditing. Reasons come from the EXM_AUDIT_REASON lookup.

Without an end date, membership lasts indefinitely.

Expense template and type rules select reports by template, or by template plus type with an amount, cumulative amount, currency and period. For example, Travel template, Entertainment over 250 USD in a month . A template-only rule audits every report on that template, such as all Training reports.

The risk indicator

Each audit reason has a predefined risk level. Examples:

High: audit list member, inactive employee, duplicate expense item, policy violation, top spender.

Medium: missing imaged receipt, keyword violation, public sector attendee.

Low: aged items, amount over threshold, receipt required.

Null: random selection.

Scores are Null 0, Low 10, Medium 40, High 120 . The report's total gives:

• Low below 40;
• Medium from 40 to below 120;

High at 120 or more.

To customize, create lookup types EXM_AUDIT_RISK_HIGH , EXM_AUDIT_RISK_MEDIUM and EXM_AUDIT_RISK_LOW and associate reason codes. Once you do, codes you leave out become Null.

The auditor's work

Access and assignment. Auditors get expense auditor data roles for their business units. They pick Unassigned Expense Reports or assign reports to their direct reports. Auditors can work in parallel with managers or after them (section 10.1).

Actions on Audit Expense Report:

Action Result

Complete Audit No employee action. Pending Payment once managers approve. Adjustments change the reimbursement amount.

Reject Expense Report Returned as Rejected . Line adjustments are discarded , and resubmission repeats approvals.

Request More Information Employee notified. Status stays Pending Payables Approval . The auditor may complete without waiting.

• Waive Receipts / Waive Receipts and Complete Audit Receipt status Waived , no notification
• Warn User and Complete Audit Employee told to review policy, and the audit completes
• Release Hold Lifts a hold pending receipts
• Confirm Manager Approval The first approver reconfirms, and the report returns for audit

Short pay. Select Short Pay with an Audit Issue on doubtful lines, then Complete Audit . The report splits : the approved lines go to payment, and the short-paid lines go back to the employee to fix or delete. Auditors can also adjust amounts, types and itemizations, and record original receipt package check-in, including by bar code.

Returning a report. An auditor can return a report in Ready for Payment Processing status for an active employee, before the invoice exists.

Reimbursement

After approval and audit, Process Expense Reimbursements creates Payables payment requests (sections 9.1 and 10.2). Holds are applied or released as part of the same run. If Pay Expense Reports Through is set to a third-party application :

The processes export XML to fin/expenses/export .

The external system pays employees and card issuers.

You load payment data into fin/expenses/import .

Update Expense Report Status marks the reports paid with the external references.

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