Internal Accounting Engineering
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The purpose of this website is to describe a completely new and comprehensive approach to 


This methodology provides management with superior cost accounting information and supports management with an emphasis on optimizing profitability.

Internal Accounting Engineering has developed a distance teaching seminar.  

Learn more details and practical knowledge about the field of Internal Managerial Accounting.

For information and registration please send email to Professor Schwarz at

Starting new seminars weekly.  

Advanced Presentation of the Chart  of  Accounts for Managerial Cost  Accounting 

To the owners of industries and managers in charge of creating higher and long lasting profits for their companies:

This website is introducing a new Internal Accounting structure. This very important tool will show you a clear picture of the internal cost  development of your economic entity.

With an Internal Charts of Accounts, we structure cost object's into precise classification of debit and credit accounts;  the composition of which are the building blocks for the Cost Elements, Cost Centers, Functional Activities and Cost of Goods Sold accounts that make up the enterprise. This is the essence of a Responsibility Accounting system.  But there is much more!

We have created a totally new concept of Internal Accounting. We arrive at a different cost for our production - because we have several Direct Production Departments - and use not just one Overhead account.  

With Internal Accounting we establish Absorption and Variance costing. This information provides Management an absolutely invaluable and intimate view of the cost of production. This detailed information is provided in reports specifically designed for department managers.

This new Chart of Accounts begins with the accounts representing the Cost Elements for the period. 

These Cost elements should be identified as Direct and Indirect Costs. The Indirect cost will be allocated to the different Departments in our company. With accounts prepared for all departments we begin to create a clear picture of a Responsibility Accounting system. For management this Responsibility Accounting structure provides important information that is not available from traditional cost systems. Within this structure we incorporate a comprehensive RE-ALLOCATION and Absorption system that integrates with the Class of Accounts corresponding to the Functional Activities, where we have set up production cost accounts for;  each product that we produce, cost of maintenance (preventive) and repair accounts for internal production.

Internal Accounting Cost-flow can be quantified and schematized so precisely, that it will help students understand the various transactions within Cost Accounting, and also help managers and supervisors understand internal cost-flow and instill in them a robust cost awareness.

Typically, Department heads, Production and Sales managers are not necessarily inclined toward the details of accounting. One reason is that the information provided in current cost accounting systems is not directly related to their daily functions. An understanding of Internal Accounting changes this, in that managers see clearly how they have direct responsibility towards the final cost objective. They must be aware of which products are making a profit, which are breaking even, and which are losing money, so that appropriate action can be taken.

This site is dedicated to the knowledge obtained in a lifetime of work and research by Dr. Emanuel Schwarz, his instruction and refinement on the Principals of Managerial Cost Accounting.  

Dr. Emanuel Schwarz is Professor Emeritus at San Francisco State University. He received his MBA and Ph.D. at the Stockholm School of Economics, with an emphasis on Managerial Cost Accounting. Schwarz has taught Cost Accounting, Budgeting,  and the Principals of Accounting at the University of California, Santa Cruz extension in Cupertino, De-Anza College and Evergreen College in San Jose, CA;  and the University of Los Andes, Bogotá, Colombia. Schwarz has also consulted a number of organizations, including the World Bank, the United Nations Industrial Development Organization, and Stanford University.  

Dr. Schwarz' research work titled 'Relevance Gained', recently re-published by 1st Books as 'The Internal Accounting System'  won the award for the best managerial accounting paper at the Second Swedish Accounting and Auditing Research Colloquium held in Umea , February 1995.

Read about this extraordinary approach to managerial accounting.  

Emanuel's  book may be purchased on-line from 1st Books at the following location:

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