臺大管理論叢 NTU Management Review VOL.30 NO.2

The Benefits of Disclosing Internal Control Weaknesses: Evidence from Taiwanese Banks 188 4.2 Descriptive Statistics Panel A of Table 3 shows that the mean value of SIZE is 12.815, reflecting New Taiwan Dollars $574 billion (approximately US$19 billion) in total assets owned by the banks. The statistics for AGE show that the age of the banks ranges from 1 to 66 years, with a mean age of 33 years. Ten percent of the observations report a loss of continuing operations over 2 consecutive years ( AGGLOSS ). The median value of ROA is 0.003 and the mean value of the standard deviation of ROA in the previous 3 years, sd ( ROA ), is 0.005. DIV_ASSET is 0.578 on average, indicating a nontrivial difference between loans and other profit-generating assets. The mean value of DIV_REV is 0.446, showing that banks are generally fairly diversified when measured on the basis of revenues. Approximately 23% of the observations report extreme sales growth ( EXGROWTH ). Regarding the corporate governance variables, the original size of the board ( BOD ) ranges from 6 to 21, with 12 directors on average. Furthermore, 10.4% of the managers are also directors on the board ( BDMGER ). Board directors hold 23% of the shares of the banks ( BDHD ). On average, 0.3% of the shares are held by bank managers ( MGERHD ). The mean value of the deviation of management and ownership ( MODEV ) is 2.472, as measured by the ratio of the percentage of controlling seats to the percentage of controlling shares. Regarding the share owners, 16% of the shares of board directors are pledged ( BDPLEDGE ), 23% are held by blockholders of the bank ( BLOCKHD ), and 62% are held by legal persons ( LEGALHD ). Finally, on average, 22% of the observations are partially held by the government ( GOVHD ). The average value of the market value of equity deflated by the lagged total assets ( MV ) is 0.067. Book value deflated by the lagged total assets ( BV ) is 0.076. Net income deflated by the lagged total assets ( NI ) is 0.001. Extreme values of the variables in Table 3 are winsorized at 1%. 9 Panel B of Table 3 presents the pair-wise difference tests between two groups—banks without and with ICW. Most of the variables appear differ significantly between the two groups at one-tailed significant levels. 9 The results remain unaffected when outliers are removed instead of using the winsorizing method.