It is frequently observed that fraud has a greater economic impact on society than any other category of crime. Arguing that both research and practitioner frameworks in auditing and forensic accounting have tended to adopt an individualizing perspective predicated primarily on solo offending, this article adopts an inductive approach to consider why individuals co‐offend in fraud. It reports the results of a set of interviews with 37 individuals convicted of a range of frauds including financial statement fraud, insider trading, credit card fraud, money laundering, and asset misappropriation. In each instance, the fraud was perpetrated by a group of two or more co‐offenders. Based on inductive, exploratory case coding, we find that reasons for co‐offending vary according to the type of bond that exists between co‐offenders. Two dimensions of fraudulent co‐offending are identified—the primary beneficiary of the fraud and the nature of group attachment—to derive three distinct archetypes of bonds between co‐offenders: (1) individual‐serving functional bonds, (2) organization‐serving functional bonds, and (3) affective bonds. Key elements of each archetype as well as their impact on the decision to co‐offend are examined. Our findings suggest that the social nature of fraud is not merely an incidental feature of the crime but is instead a potential key to understanding its etiology and some of its distinctive features. They also support the need for diagnostic tools to move beyond individualistic analyses of fraud toward a broader, group‐sensitive assessment of fraud risk.

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ABSTRACT We create and validate measures capturing internal and external motivations to report honestly as trait‐like characteristics. Both measures have high levels of reliability, as well as convergent and divergent validity. To test their predictive validity, we conduct two experiments. In the first experiment, MTurk participants have the opportunity and incentive to misreport with no immediate consequences, and in the second experiment, participants with management experience report how they would make a hypothetical accounting allocation decision. In both experiments, we find that participants who are higher in internal motivations to report honestly are more likely to report honestly than those lower in internal motivations, confirming this measure's predictive validity. Both experiments also provide limited support for the predictive validity of our external measure, finding that those who are higher in external motivation do not report differently than those who are lower in external motivations in the absence of controls. Our study also reveals that individuals who are higher in internal motivations have a diminished reaction to different management controls: MTurk participants to a control that punishes misreporting, and manager participants to a control that rewards honest reporting. Results suggest that management and those charged with governance should consider that some employees can react negatively to controls that are perceived as constraining. Our measures are useful to researchers who investigate honest reporting by allowing them to identify, ex ante, individuals who want to be honest versus wanting to appear honest.