Hi, we are setting up our expense report audit procedures in China. The local team is reluctant to reduce 100% audit of receipts, citing concern over regulatory compliance. I would like to focus on high risk areas. It would be great to hear your experiences and suggestions for what you have found to be the highest risk areas.
You can start at 100% to ensure the Audit team or Finance is confident at the process to start.
Review it quarterly and based on the user behavior, rate of rejection, cash vs card usage, corruption index etc, you can reduce the % to a suitable level. We typically use a Corruption Index and rate of rejection as a parameter to lower or increase Audit by country.
You can work on a certain threshold amount defined by the policy above which Audit is a must.
You can also define certain expense type require 100% Audit. These expense types are typically large expense types and also where you have historically found misinformation by user.
Thank you! We are taking some of your suggestions, such as watching higher risk out of pocket expenses. We were hoping to not start with 100% audit, but we agree it is important to have the confidence of the local finance team. We are just implementing Concur. As we generate data, we will be able to analyze the risk better. Thanks for answering!
Thanks for posting! Just wanted to provide some info from the SAP Concur perspective:
The majority of greater China on-boarding’s have been configured for 100% audit selection. The only uniqueness included on the audit profiles relates to the FAPIAO stamp required for corporate income tax deductibility. A new stamp was released on 01/01/19. “ So I would still recommend doing the 100% Policy audit. When on-boarding, the Audit team usually covers the following criteria focused on Chinese reports:
I hope this helps!