When outsiders do not enjoy access to the same information as the insiders, executives of would-be acquirers can engineer a higher share price by creative accounting. And, once again, the overvalued shares can be exchanged for the target’s shares on favourable terms, making it attractive to secure an acquisition which offers no operating gains. The same outcome may be achieved by issuing biased earnings forecasts of post-merger earnings – to inflate the price of shares offered in exchange for the target. Once the deal has been agreed, the accounting procedures for combining the accounts of the two firms have offered rich opportunities to flatter the earnings reported post-merger. At the end of the process, if the merger fails badly, accounting regulations often leave sufficient flexibility for the CEO who led the merger to conceal the damage, or for his successor to exaggerate it. The chapter explains how manipulation may go undetected at the time by shareholders. Along with Appendix 2 it gives illustrations of devices in action in major companies. And it reports statistical evidence on earnings management, earnings forecasts, and their impact on share prices.