diff --git a/src/libs/TransactionUtils/index.ts b/src/libs/TransactionUtils/index.ts
index 69507a651d9f..6f8134a40e9c 100644
--- a/src/libs/TransactionUtils/index.ts
+++ b/src/libs/TransactionUtils/index.ts
@@ -1104,13 +1104,14 @@ function shouldShowViolation(iouReport: OnyxEntry<Report>, policy: OnyxEntry<Pol
     const isSubmitter = isCurrentUserSubmitter(iouReport);
     const isPolicyMember = isPolicyMemberPolicyUtils(policy, currentUserEmail);
     const isReportOpen = isOpenExpenseReport(iouReport);
+    const isOpenOrProcessingReport = isReportOpen || isProcessingReport(iouReport);
 
     if (violationName === CONST.VIOLATIONS.AUTO_REPORTED_REJECTED_EXPENSE) {
         return isSubmitter || isPolicyAdmin(policy);
     }
 
     if (violationName === CONST.VIOLATIONS.OVER_AUTO_APPROVAL_LIMIT) {
-        return isPolicyAdmin(policy) && !isSubmitter;
+        return isPolicyAdmin(policy) && !isSubmitter && isOpenOrProcessingReport;
     }
 
     if (violationName === CONST.VIOLATIONS.RTER) {
diff --git a/tests/unit/TransactionUtilsTest.ts b/tests/unit/TransactionUtilsTest.ts
index 02586c40a4cb..d482d7043c52 100644
--- a/tests/unit/TransactionUtilsTest.ts
+++ b/tests/unit/TransactionUtilsTest.ts
@@ -9,8 +9,9 @@ import type {CustomUnit, Rate} from '@src/types/onyx/Policy';
 import type {ReportCollectionDataSet} from '@src/types/onyx/Report';
 import type {TransactionCustomUnit} from '@src/types/onyx/Transaction';
 import * as TransactionUtils from '../../src/libs/TransactionUtils';
-import type {Policy, Transaction} from '../../src/types/onyx';
+import type {Policy, Report, Transaction} from '../../src/types/onyx';
 import createRandomPolicy, {createCategoryTaxExpenseRules} from '../utils/collections/policies';
+import {createRandomReport} from '../utils/collections/reports';
 import waitForBatchedUpdates from '../utils/waitForBatchedUpdates';
 
 function generateTransaction(values: Partial<Transaction> = {}): Transaction {
@@ -726,4 +727,24 @@ describe('TransactionUtils', () => {
             expect(result).toBe(true);
         });
     });
+
+    describe('shouldShowViolation', () => {
+        it('should return false for auto approval limit violation when report is not open/processing report', () => {
+            const iouReport: Report = {
+                ...createRandomReport(0),
+                type: CONST.REPORT.TYPE.EXPENSE,
+                chatType: undefined,
+                statusNum: CONST.REPORT.STATUS_NUM.APPROVED,
+                stateNum: CONST.REPORT.STATE_NUM.APPROVED,
+                ownerAccountID: 2,
+            };
+
+            const policy: Policy = {
+                ...createRandomPolicy(0, CONST.POLICY.TYPE.TEAM),
+                role: CONST.POLICY.ROLE.ADMIN,
+            };
+
+            expect(TransactionUtils.shouldShowViolation(iouReport, policy, CONST.VIOLATIONS.OVER_AUTO_APPROVAL_LIMIT)).toBe(false);
+        });
+    });
 });