The way GAAP tackles shams like that is "consolidation". [1] For example, you report wholly owned subsidiaries as if they are part of the parent organization.

Clearly, accountants and lawyers can engage in fuckery as they did at Enron. But the law is fully capable of calling out a sham, even it it has recently become reluctant to do so.

[1] https://www.pwc.com/us/en/cfodirect/publications/accounting-...