diff --git a/src/components/MoneyReportHeader.tsx b/src/components/MoneyReportHeader.tsx
index ab23a4f840e5..321482f7177c 100644
--- a/src/components/MoneyReportHeader.tsx
+++ b/src/components/MoneyReportHeader.tsx
@@ -119,7 +119,7 @@ function MoneyReportHeader({policy, report: moneyRequestReport, transactionThrea
         [moneyRequestReport, chatReport, policy, transaction],
     );
 
-    const shouldShowApproveButton = useMemo(() => IOU.canApproveIOU(moneyRequestReport, chatReport, policy), [moneyRequestReport, chatReport, policy]);
+    const shouldShowApproveButton = useMemo(() => IOU.canApproveIOU(moneyRequestReport, policy), [moneyRequestReport, policy]);
 
     const shouldDisableApproveButton = shouldShowApproveButton && !ReportUtils.isAllowedToApproveExpenseReport(moneyRequestReport);
 
diff --git a/src/components/ReportActionItem/ReportPreview.tsx b/src/components/ReportActionItem/ReportPreview.tsx
index 45a06968cefd..ad29a8d84141 100644
--- a/src/components/ReportActionItem/ReportPreview.tsx
+++ b/src/components/ReportActionItem/ReportPreview.tsx
@@ -299,7 +299,7 @@ function ReportPreview({
 
     const shouldShowPayButton = useMemo(() => IOU.canIOUBePaid(iouReport, chatReport, policy, allTransactions), [iouReport, chatReport, policy, allTransactions]);
 
-    const shouldShowApproveButton = useMemo(() => IOU.canApproveIOU(iouReport, chatReport, policy), [iouReport, chatReport, policy]);
+    const shouldShowApproveButton = useMemo(() => IOU.canApproveIOU(iouReport, policy), [iouReport, policy]);
 
     const shouldDisableApproveButton = shouldShowApproveButton && !ReportUtils.isAllowedToApproveExpenseReport(iouReport);
 
diff --git a/src/libs/actions/IOU.ts b/src/libs/actions/IOU.ts
index f935b813cebd..83e35f2fb420 100644
--- a/src/libs/actions/IOU.ts
+++ b/src/libs/actions/IOU.ts
@@ -6776,15 +6776,9 @@ function sendMoneyWithWallet(report: OnyxEntry<OnyxTypes.Report>, amount: number
     Report.notifyNewAction(params.chatReportID, managerID);
 }
 
-function canApproveIOU(
-    iouReport: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Report>,
-    chatReport: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Report>,
-    policy: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Policy>,
-) {
-    if (isEmptyObject(chatReport)) {
-        return false;
-    }
-    const isPaidGroupPolicy = ReportUtils.isPaidGroupPolicyExpenseChat(chatReport);
+function canApproveIOU(iouReport: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Report>, policy: OnyxTypes.OnyxInputOrEntry<OnyxTypes.Policy>) {
+    // Only expense reports can be approved
+    const isPaidGroupPolicy = policy && PolicyUtils.isPaidGroupPolicy(policy);
     if (!isPaidGroupPolicy) {
         return false;
     }
@@ -6796,9 +6790,7 @@ function canApproveIOU(
 
     const managerID = iouReport?.managerID ?? -1;
     const isCurrentUserManager = managerID === userAccountID;
-    const isPolicyExpenseChat = ReportUtils.isPolicyExpenseChat(chatReport);
-
-    const isOpenExpenseReport = isPolicyExpenseChat && ReportUtils.isOpenExpenseReport(iouReport);
+    const isOpenExpenseReport = ReportUtils.isOpenExpenseReport(iouReport);
     const isApproved = ReportUtils.isReportApproved(iouReport);
     const iouSettled = ReportUtils.isSettled(iouReport?.reportID);
     const reportNameValuePairs = ReportUtils.getReportNameValuePairs(iouReport?.reportID);
@@ -6848,7 +6840,7 @@ function canIOUBePaid(
 
     const {reimbursableSpend} = ReportUtils.getMoneyRequestSpendBreakdown(iouReport);
     const isAutoReimbursable = policy?.reimbursementChoice === CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_YES ? false : ReportUtils.canBeAutoReimbursed(iouReport, policy);
-    const shouldBeApproved = canApproveIOU(iouReport, chatReport, policy);
+    const shouldBeApproved = canApproveIOU(iouReport, policy);
 
     const isPayAtEndExpenseReport = ReportUtils.isPayAtEndExpenseReport(iouReport?.reportID, transactions);
 
@@ -6871,7 +6863,7 @@ function hasIOUToApproveOrPay(chatReport: OnyxEntry<OnyxTypes.Report>, excludedI
     return Object.values(chatReportActions).some((action) => {
         const iouReport = ReportUtils.getReportOrDraftReport(action.childReportID ?? '-1');
         const policy = PolicyUtils.getPolicy(iouReport?.policyID);
-        const shouldShowSettlementButton = canIOUBePaid(iouReport, chatReport, policy) || canApproveIOU(iouReport, chatReport, policy);
+        const shouldShowSettlementButton = canIOUBePaid(iouReport, chatReport, policy) || canApproveIOU(iouReport, policy);
         return action.childReportID?.toString() !== excludedIOUReportID && action.actionName === CONST.REPORT.ACTIONS.TYPE.REPORT_PREVIEW && shouldShowSettlementButton;
     });
 }