I think what the issue might be is that people are confused with what GAAP is. While GAAP used to be primarily focused on accrual basis account - which requires that revenues be recognized in the period in which a sale is made and expenses in the period in which they are incurred, this is no longer the case. For at least the last 20 years, the Financial Accounting Standards Board has focused on fair value accounting, rather than pure accrual accounting. By its very nature, fair value accounting gives management significant leeway in the numbers that it reports. Thus, what is reported may not be a company's actual financial position on the balance sheet date or its results of operations for the period covered by the profit and loss statement.

For small businesses not required to produce GAAP financial statements, the AICPA has developed the Financial Reporting Framework for Small and Medium-sized Entities, which follows accrual principles much more closely than current GAAP.