Iranian Angle to Non-Audit Services: Some Empirical Evidence
Mahdi Salehi and Mehdi Moradi

The purpose of this paper is to show different Iranian accountants’ as well shareholders’ ideas on Non-audit services and their effects on audit independence in Iran. In other words, in this paper the authors have attempted to deal with this question: does providing non-audit services by an Iranian auditor impair audit independence? And in order to gather usable data a suitable questionnaire was designed and developed. The results of this study show that the participants strongly believe that non-audit services may impair audit independence. It is interesting to note that, although the auditors offer to clients non-audit services, they believe that offering such services leads to audit independence being questionable. Further, the result reveals that literate participants moderately agree that NAS has a negative effect on audit independence, however illiterate participants strongly agree that NAS has a negative affect on audit independence. This paper is the first paper which includes two groups of participants: the first group is auditors in general, or we can call them academiciana with pretensions to having auditing literacy and the second group is non- academician, including stakeholders who may not have auditing literacy skills. This may useful for future studies regarding the non-audit service and its effect on audit independence.

Key Words: auditor, independence, non-audit services, Iran
JEL Classification: M41, M42
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Assessing Microfinance: The Bosnia and Herzegovina Case
AnneWelle-Strand, Kristian Kjollesdal, and Nick Sitter

Microfinance is often hailed both as a tool for fighting poverty and as a tool for post-conflict reconciliation. This paper explores the use of microfinance in post-civil war Bosnia and Herzegovina, assessing its results in terms of both goals. As it combined high unemployment with a highly educated population in an institutionally open context, Bosnia and Herzegovina provides a crucial test of the effect of microfinance. If unambiguous signs of success cannot be found in a case with such favorable conditions, this would raise serious questions about the potential benefits of microfinance. The paper draws together evidence from a series of independent reviews of microfinance in Bosnia and Herzegovina, to assess its impact in terms of economic performance, the economic system, social welfare and post-conflict integration. Based on this case study, microfinance appears a better tool for dealing with poverty than with social integration or institution building.

Key Words: micro finance, post-conflict, poverty alleviation, economic development, Bosnia and Herzegovina
JEL Classification: G21, O1
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Application of Bootstrap Methods in Investigation of Size of the Granger Causality Test for Integrated VAR Systems
Łukasz Lach

This paper examines the size performance of the Toda-Yamamoto test for Granger causality in the case of trivariate integrated and cointegrated VAR systems. The standard asymptotic distribution theory and the residual-based bootstrap approach are applied. A variety of types of distribution of error term is considered. The impact of misspecification of initial parameters as well as the influence of an increase in sample size and number of bootstrap replications on size performance of Toda-Yamamoto test statistics is also examined. The results of the conducted simulation study confirm that standard asymptotic distribution theory may often cause significant over-rejection. Application of bootstrap methods usually leads to improvement of size performance of the Toda-Yamamoto test. However, in some cases the considered bootstrap method also leads to serious size distortion and performs worse than the traditional approach based on chi-square distribution.

Key Words: bootstrap methods, simulation, Granger causality, VAR models
JEL Classification: C12, C15
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Development, Validity and Reliability of Perceived Service Quality in Retail Banking and its Relationship With Perceived Value and Customer Satisfaction
Aleksandra Pisnik Korda and Boris Snoj

Despite its popularity, the concept of service quality in the marketing literature is still ambiguously and vaguely defined. Several measurement scales have been proposed, but some of these take into account only the method of measurement and ignore the idea that the same instrument may not be able to be automatically applied in different industries or in different cultures. Therefore the purpose of this paper is twofold: first to validate the perceived retail banking service scale in the case of a small transitional economy of Europe, and second to research service quality-customer satisfaction relationship and the role of perceived value within it. Content validity, face validity, construct validity, convergent validity, discriminant validity as well as nomological validity were assessed with EFA, CFA and SEM. The present research is the first attempt to measure the relationships among the concepts researched in the retailing banking industry in transitional economies in Europe. Therefore, its major finding, that the perceived value variable has a potential to be mediating variable between perceived quality and customer satisfaction relationship in retail banking settings, could be of interest also for other researchers in transitional economies in Europe and also for researchers from other environments.

Key Words:perceived quality, perceived value, satisfaction, retail banking services
JEL Classification: M30, M31
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Achieving Increased Value for Customers Through Mutual Understanding Between Business and Information System Communities
Dijana Močnik

Business strategy and information systems (IS) alignment is a longstanding issue in IS management. Information technology IT innovation, regulated by a deep understanding of value creation for customers, allows for profound changes in how companies operate and how economic exchanges are structured. To be able to achieve superior performance, companies must build business models that incorporate the competitive features found in their IT. Realizing such innovation requires a common language between people from business and IT departments. This article discusses essential elements of the continuous IT innovation process, including generating ideas, developing concepts, and realizing concepts for IT innovation. System projects jointly implemented by business departments and it departments proved to be more successful, because only this approach ensured full consideration of what is important from a company-wide perspective.

Key Words: business model, value creation, innovation, information technology, information systems
JEL Classification: L15, Q31
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