Each year, the Association of Certified Fraud Examiners (ACFE) publishes the globally recognized “Report to the Nations”, analyzing thousands of real-world occupational fraud cases. The 2024 edition once again reveals the significant damage fraud causes to organizations—and highlights just how many of these incidents could potentially have been prevented through effective pre-employment and employment screening measures. (Url: https://www.acfe.com/-/media/files/acfe/pdfs/rttn/2024/2024-report-to-the-nations.pdf)
Key Findings from the Report
The data is striking:
- 89% of reported cases involved asset misappropriation
- 48% involved some form of corruption
- Executives and owners were responsible for median losses of up to $500,000
- 84% of perpetrators exhibited observable behavioral red flags
These insights lead to a critical question:
How can fraudulent behavior be identified before a hiring decision is made—and how can organizations proactively mitigate risk?
The Role of Screening in Fraud Prevention
- Preventing Theft and Embezzlement
Asset misappropriation remains the most common type of occupational fraud. Comprehensive background checks—reviewing past employment issues, legal troubles, or suspicious employment gaps—can help filter out high-risk candidates before they’re hired.
- Detecting Corruption Risks
Corruption often stems from hidden relationships or conflicts of interest. Today’s screening practices include checking financial ties, reviewing social media activity, and verifying business affiliations—exposing red flags that may not be visible on a résumé.
- Mitigating Executive-Level Fraud
Executive-level fraud tends to result in the highest financial losses. That’s why screening for top roles should be deeper and more thorough—focusing on integrity, financial vulnerabilities, reputation, and potential conflicts of interest.
- Identifying Red Flags Before They Become Problems
The ACFE found that most fraudsters showed at least one behavioral red flag prior to being caught—such as living beyond their means or experiencing financial pressure. Structured interviews, reference checks, and psychometric assessments can help uncover these signals during the recruitment phase.
- Addressing Emerging Threats like Crypto-Fraud
With digital payments and cryptocurrency fraud on the rise, companies must stay vigilant. Screening processes that assess an applicant’s financial activity, especially in crypto-related roles, can identify potential high-risk individuals before they gain access to sensitive systems or funds.
Screening as a Strategic Investment
Beyond risk mitigation, screening sends a strong internal and external message:
“We take integrity seriously.” When integrated with robust internal controls and periodic re-screenings, your hiring process becomes part of a company-wide culture of trust, compliance, and accountability.
Final Takeaway: Prevention Is More Cost-Effective Than Remediation
The 2024 ACFE Report makes one thing clear:
Fraud is not rare—it’s systemic.
But it also proves that many cases could have been avoided or reduced through structured screening practices.
Investing in pre-employment and employment screening means investing in risk reduction, stakeholder confidence, and long-term business resilience.
Looking to develop a customized screening strategy for your company?
We support organizations in building and implementing tailored screening processes—from basic background checks to comprehensive fraud risk evaluations.
Author: S. Leitgeb, B.A., CSO of TRIAS Solutions GmbH, brings over 25 years of professional experience in various sectors of the security industry. He leverages his extensive expertise and knowledge to support stakeholders in the private sector. During his academic studies, he conducted in-depth research on the topics of disinformation and hybrid threats.
