Information Overload in Financial Reporting and Behavioral Decision-Making: Institutional Investors’ Perspectives

Abstract

Financial reporting standards aim to increase transparency; however, the expansion in disclosure volume may also create an information overload paradox for investors, an issue that remains underexplored in the context of institutional investors. Excess information beyond mandatory requirements may complicate decision environments and create cognitive burden. When information exceeds cognitive processing capacities, attention may become fragmented, making it more difficult to distinguish signal from noise and potentially leading to analysis paralysis and changes in risk perception. Drawing on bounded rationality and cognitive load theory, this study conceptualizes information overload as a behavioral constraint associated with perceived limitations in decision quality and speed and, accordingly, examines its influence on institutional investors’ decision processes through a phenomenological approach. The study employs thematic analysis based on in-depth interviews with 19 professionals in institutional investment organizations in Türkiye. The findings suggest that information overload is experienced as cognitive strain that may prolong decision processes, may be associated with analysis paralysis and perceived changes in decision quality, and may be associated with increased uncertainty and potential challenges in interpreting risk. These findings provide exploratory insight into how information density may influence risk interpretation and portfolio assessment, and how institutional investors perceive decision-making efficiency.

1. Introduction

Investors largely base their decisions regarding the balance between risk and return on financial information disclosed by firms. Contrary to the assumptions of classical economic thought, the behavioral finance and behavioral accounting literature suggests that decision makers operate under cognitive limitations rather than full rationality. Within the framework of Simon’s (1955) bounded rationality approach, when the amount of information exceeds manageable levels, the cognitive processing capacities of decision makers may become strained, and decision quality may be adversely affected. This phenomenon has been discussed in the literature through the “Inverted U-Curve” model (Eppler & Mengis, 2004). Even though increasing disclosure requirements in financial reporting standards are intended to enhance informational transparency, the growing volume of footnotes and increasingly detailed disclosures may also create informational complexity, potentially making it more difficult for investors to focus on core performance indicators and other financially relevant information.

The overload of information presented in financial statements may make it more difficult for investors to distinguish signals from noise, expose them to high information-processing costs, potentially contribute to analysis paralysis, and weaken the timely assessment of relevant risk information. Firms may in some cases be perceived to make use of this situation as a form of informational obfuscation, potentially making it more difficult for investors to identify the firm’s economically meaningful signals. Consequently, financial reports may be perceived to move away from functioning as communication tools and may increasingly resemble accumulations of information that are not equally relevant for decision-making.

The behavioral finance literature has largely concentrated on the decision mechanisms of individual investors, while studies addressing the behavior of institutional investors in environments characterized by information overload remain limited, particularly in terms of qualitative evidence on how professional investors interpret and manage such environments. The increasing volume of financial reporting creates a decision environment that may challenge not only individual investors but also institutional investors, particularly when the identification of risk-relevant information becomes more difficult, a condition that has been predominantly examined in relation to individual investors in prior research. More specifically, prior research has predominantly examined information overload through theoretical discussions, experimental designs, and survey-based evidence, focusing on disclosure volume, cognitive burden, and investor reactions, while offering more limited insight into how institutional investors experience and interpret information overload in real-world reporting environments. In such environments, difficulties in identifying relevant signals may influence how investors perceive and interpret financial information, evaluate risk, and prioritize which information is decision-useful under conditions of cognitive strain. Within the framework of bounded rationality as the primary theoretical perspective and the Inverted U-Curve as a complementary perspective, this study focuses on institutional investors operating in the financial markets of Türkiye as an example of an emerging market, where institutional and regulatory conditions may shape how information is interpreted, and examines how information overload in financial reporting is perceived to influence their decision processes, particularly in relation to the interpretation and evaluation of risk-related information. To examine these experiences in depth, this study adopts a phenomenological qualitative research approach, as it aims to capture the lived experiences and interpretive processes of institutional investors under conditions of information overload. This study addresses a critical gap in the literature by moving beyond the dominant focus on individual investors and quantitative approaches, which have primarily examined information overload in generalized and model-driven settings, and instead offering qualitative, mechanism-oriented insights—based on purposive sampling and in-depth interviews—into how institutional investors perceive and interpret information overload in financial reporting environments, thereby aiming to develop a context-specific understanding of how informational complexity and institutional structures may shape professional decision processes in an emerging market setting. The originality of this study lies in its focus on institutional investors, its phenomenological qualitative design, and its emphasis on real-world reporting environments within an emerging market context. Institutional investors play an important role in financial markets as key allocators of capital, influencing price formation, market liquidity, and the transmission of financial information, which makes understanding how they interpret complex reporting environments particularly important. Data were collected through semi-structured interviews and analyzed thematically using MAXQDA 2024, following a systematic coding and theme development process. This study aims to examine how information overload in financial reports is perceived to influence the decision processes of institutional investors and to provide mechanism-oriented insights into how this influence may shape the interpretation and evaluation of risk-related information in professional investment contexts. In this sense, the study approaches information overload not merely as a disclosure-volume problem, but as a potential source of changes in risk-sensitive financial judgment under conditions of information complexity, as perceived by institutional investors. The study is guided by the following research questions:

(RQ1) How do institutional investors experience information overload in financial reporting environments?

(RQ2) How is information overload perceived to influence their interpretation and evaluation of risk-related information?

(RQ3) How do institutional investors prioritize decision-useful information under conditions of reporting complexity?

The remainder of the article is organized as follows. The Section 2 presents the theoretical framework, the Section 3 explains the methodology and data collection process, and the Section 4 reports the findings. The Section 5 discusses the findings, and the Section 6 concludes with implications and recommendations.

2. Theoretical Framework

Firms are required to disclose to the public events and developments that may influence the decisions of potential investors. The issue is closely related to the materiality of information. If the omission of required information or its misrepresentation is likely to influence the decisions of financial information users, that information is considered material. As emphasized in accounting theory, information regarded as historical may be supported with forward-looking information to enhance its decision-usefulness for users of financial information. Accordingly, to respond to the evolving information needs of financial information users, firms may go beyond mandatory reporting requirements and provide additional disclosures that may contribute to information overload (Wallman, 1995). Recent and prior disclosure research suggests that excessive, complex, or poorly structured disclosures may reduce the decision-usefulness of financial reporting by increasing processing costs, limiting interpretability, and making it more difficult for users to identify decision-relevant information (Saha et al., 2019; Aghamolla & Smith, 2023; Efretuei & Yekini, 2025).

Information that is presented in financial statements beyond what is required under the relevant laws and accounting standards, as well as information that has limited relevance to the decision-making processes of financial statement users, may be considered information overload. In this context, information overload may be defined as surplus information that may complicate the information interpretation processes of financial information users and consequently influence the rationality of their decisions. To explain this mechanism, this study adopts bounded rationality as its primary theoretical framework, while Cognitive Load Theory and the Inverted U-Curve model are used as complementary perspectives. Concepts such as the white noise effect, the Cassandra effect and Signal Detection Theory are incorporated as interpretive background mechanisms. According to Cognitive Load Theory, when the amount of information individuals can process within a given period (their information-processing capacity) is exceeded, information may no longer function as a decision-support tool and may instead be experienced as a cognitive burden, which, within a bounded rationality framework, may limit investors’ ability to effectively process and interpret risk-related information. This cognitive limitation corresponds with the fundamental assumption of the bounded rationality approach introduced by Simon (1955) and provides a basis for understanding how institutional investors make decisions under conditions of information complexity. Extensive footnote disclosures and technical details in financial reports may create mental strain even for institutional investors, thereby potentially complicating the decision-making process and influencing how risk-related information may be interpreted. Wallman (1995) associates this situation with the transparency illusion, whereby increasing disclosure volume does not necessarily improve informational clarity. Accordingly, with each additional piece of information presented to appear more transparent, firms may contribute to a less clear informational environment, potentially making it more difficult for investors to interpret financial and risk-relevant signals. Similarly, according to the Inverted U-Curve model, while an increase in the amount of information may support decision-making up to a certain threshold, beyond this threshold it may reduce decision accuracy and increase the likelihood of difficulties in interpreting risk-related information (Eppler & Mengis, 2004; Roetzel, 2019). Building on this perspective, increasing disclosure complexity may also create uncertainty regarding when sufficient information has been obtained, particularly in time-sensitive investment decisions.

From a signal detection perspective, these cognitive and informational constraints can be further understood as mechanisms that explain how information overload interferes with the identification of decision-relevant signals. This situation can be interpreted through the white noise effect, while the Cassandra effect helps explain why valid warning signals may remain unnoticed within excessive information. The attention scarcity approach further supports this mechanism by arguing that investor attention constitutes one of the most limited resources in financial markets. From this perspective, in an environment of information overload, investors may focus on less relevant technical details rather than on critical financial signals, thereby facing difficulties in distinguishing between signal and noise. This situation may place strain on investors’ cognitive resources and may reduce their strategic focus, ultimately making it more difficult for them to recognize relevant signals under conditions of information complexity.

When considering the theoretical approaches on this issue collectively, the impact of information overload on investment decisions may be understood not only as a technical reporting problem but also as a process mediated through cognitive and behavioral mechanisms, particularly in terms of how investors interpret, prioritize, and evaluate risk-related information under conditions of cognitive strain. These perspectives collectively suggest that information overload may influence investment decision processes through interconnected cognitive constraints and signal interpretation challenges. Unlike prior studies that predominantly treat information overload as a general cognitive limitation, the present study conceptualizes it as a mechanism that may shape how risk-related information is processed and evaluated in institutional investment contexts. In this sense, the study contributes to existing theoretical perspectives by explicitly linking information overload to risk-sensitive financial judgment and by clarifying the role of attention dispersion and signal distortion in this process. In this context, the conceptual framework developed within the scope of the present study illustrates how information overload may influence investors’ decision processes through a holistic mechanism illustrated in Figure 1 below.

The model presented in Figure 1 illustrates how information overload may influence investor behavior. This model provides a structured representation of the underlying behavioral mechanism and integrates the theoretical relationships discussed above. Accordingly, the increasing volume of information in financial reports may first create a burden on investors’ cognitive processing capacity. This may lead to attention dispersion and make important financial and risk-relevant signals less salient among unnecessary details. As the process continues, the decision-making process may become prolonged, analysis paralysis may emerge, and perceived decision quality may decline. By integrating bounded rationality, cognitive load theory, and signal detection theory, the model illustrates the behavioral impact of information overload, particularly in relation to how investors interpret and respond to risk-related information.

3. Materials and Methods

3.1. Research Design and Approach

Within the positivist scientific paradigm, quantitative methods are typically employed to examine phenomena based on the principle of objectivity. However, because the concept of information overload examined in this study may vary depending on investors’ experiences and may involve subjective interpretations shaped by cognitive processes, a qualitative method was considered more appropriate. This is because the phenomenon under investigation is not limited to observable outcomes, but is closely related to how investors interpret, filter, and make sense of complex financial information, processes that may not be adequately captured through standardized quantitative measures. In this context, a purely quantitative approach may be limited in capturing the complexity of how investors interpret and respond to information overload in real decision-making settings.

Therefore, the qualitative approach adopted in this study should be understood as a deliberate methodological choice aligned with the exploratory nature of the research problem and aimed at uncovering the cognitive and behavioral processes underlying investment decision-making. This study aims to explore the views of professionals working in institutional investment firms regarding how information overload is associated with investment decision-making processes through the use of a semi-structured interview technique. Accordingly, a phenomenological approach, which is among qualitative research methods, was employed in order to capture the lived experiences of participants and to provide in-depth insight into the cognitive and interpretive processes underlying their decision-making. A phenomenological approach was specifically preferred over generic qualitative inquiry and thematic analysis because the aim of the study is not only to identify recurring patterns in the data but also to understand how participants experience and interpret information overload in their professional decision-making processes. While thematic analysis primarily focuses on categorizing data into themes, phenomenology enables a deeper exploration of lived experiences and meaning-making processes. Therefore, this approach provides a more appropriate framework for capturing the cognitive and interpretive dimensions of information overload as experienced by institutional investors.

It should be noted that the aim of this study is not to produce statistically generalizable findings, but to provide in-depth, context-specific insight into how information overload is experienced and interpreted by institutional investors. Rather than seeking generalization, the study focuses on uncovering underlying cognitive and behavioral mechanisms associated with information overload. In addition, the findings should be understood as context-bound insights derived from the subjective experiences and interpretations of institutional investors within a specific institutional setting and based on a limited number of participants. Accordingly, they are not intended to provide statistically generalizable or universally representative conclusions.

3.2. Sample and Data Collection Instrument

A purposive sampling method was used in this study, and professionals working in institutional investment organizations that are members of the Turkish Capital Markets Association were selected as information-rich cases with direct experience in complex financial decision-making environments, allowing for an in-depth examination of the phenomenon under investigation. Participants were selected based on their professional experience, active involvement in investment decision-making processes, and exposure to complex financial reporting environments, ensuring that they could provide relevant and information-rich insights into the phenomenon under investigation. Institutional investors were selected because they are professional users of financial reports who regularly evaluate complex disclosures, filter decision-relevant information, and interpret financial and risk-related signals in investment decision-making processes. Therefore, they represent an appropriate participant group for examining how information overload is experienced and interpreted in professional investment contexts. In this study, a total of nineteen professionals working in three separate institutional investment firms operating in Istanbul and Ankara were included, representing experienced participants with relevant professional backgrounds. In phenomenological research, similar expressions may begin to repeat after a certain point, indicating the emergence of data saturation. It is generally accepted that new participants may no longer be necessary in the sample once the data obtained from interviews begin to be repeated by participants and both thematic saturation and meaning saturation are considered to have been reached (Creswell, 2016; Lowe et al., 2018; Patton, 2018). Since qualitative studies are generally considered exploratory studies focusing on a limited number of participants or small groups, the literature suggests a sample size ranging from three to thirty participants (Palinkas et al., 2015; Gentles et al., 2015). Accordingly, in this study the sample size was limited to nineteen participants because both thematic and meaning saturation were reached and the responses provided by participants began to repeat, suggesting that additional data collection would be unlikely to yield substantially new insights. Saturation was assessed through an iterative coding process, in which interview data were continuously analyzed and compared, and no new codes or themes emerged in the later stages, indicating that both thematic and meaning saturation had been achieved. In this sense, the adequacy of the sample size can be evaluated based on the depth and richness of the data rather than numerical representativeness, which is consistent with the principles of qualitative research.

Participants were included in this study on a voluntary basis after signing an informed consent form, ensuring ethical compliance and voluntary participation. It was assured that no information that could reveal the identity of the participants would be requested and that the data obtained from the research would be used solely for academic purposes. The data collection process was conducted in sessions lasting approximately 30–40 min. Interviews were conducted in a professional and relatively neutral setting to minimize external influences. However, it is acknowledged that the context in which the interviews were conducted may have influenced how participants articulated their responses. The interview protocol, including the interview questions, was developed based on the theoretical framework and relevant literature to ensure conceptual alignment. To enhance clarity and content validity, the questions were reviewed by an academic expert in the field. In addition, a pilot interview was conducted with one participant to evaluate the clarity, flow, and comprehensibility of the questions, and minor revisions were made accordingly. In this context, the open-ended interview form consists of four sections: the Section 1 includes questions related to the participant, the Section 2 includes questions related to the characteristics of financial information, the Section 3 includes questions regarding information overload, and the Section 4 and Section 6 includes questions related to investment decisions. The full interview form is provided in Appendix A. It should be noted that the inclusion of participants from a limited number of institutional investment firms may reflect shared organizational routines and professional practices, which could have influenced how certain themes emerged and were interpreted in the analysis. Accordingly, the findings aim to provide context-specific insights into the experiences and perceptions of institutional investors. The semi-structured interview form is attached as Appendix A.

3.3. Data Analysis, Validity, and Reliability

The qualitative data obtained from this study were analyzed using the MAXQDA 2024 software, which was used to organize, code, and systematically analyze the interview data in a structured manner. After being transferred into the software, the qualitative data underwent several structured stages, including the refinement and coding of raw data, the grouping of expressions according to their shared characteristics in order to identify themes, and the visualization of participants’ mental models. The analysis process followed a structured workflow. First, the interview data were transcribed and imported into MAXQDA for systematic organization. Second, an initial open coding process was conducted to identify meaningful units within the data. Third, similar codes were grouped into categories based on conceptual similarity. Finally, these categories were refined into higher-level themes that reflect recurring patterns in participants’ experiences. The data entered into MAXQDA consisted of verbatim transcripts of the semi-structured interviews. During the coding process, analytical categories were constructed based on conceptual similarity and recurring meanings identified in the data. For example, statements referring to difficulties in interpreting financial reports were coded under categories such as “information complexity” and “cognitive burden,” which were later integrated into broader themes related to information overload. The themes generated through this process were systematically interpreted in relation to the research objectives and the theoretical framework of the study. The analytical outputs obtained from MAXQDA, including coded segments and thematic groupings, were used to identify patterns in participants’ experiences and to support the development of the study’s findings. These results were then integrated into the study’s argumentation by linking empirical insights with the theoretical perspectives discussed in the literature. To enhance the validity of the analysis, expert input was consulted, and direct quotations from participants were used to support transparency and credibility. In addition, reflexivity was maintained throughout the analysis process by critically reflecting on the researchers’ assumptions and ensuring that coding decisions were grounded in the data rather than influenced by prior expectations, while consistency across codes and themes was ensured through iterative comparison of the data. The inter-coder reliability calculation proposed by Miles and Huberman (1994) was employed to test the consistency and reliability of the qualitative data analysis. The statements addressed by the participants were coded independently by the researcher and by an academic expert in the relevant field to minimize potential subjectivity. Themes reflecting agreement and disagreement between the two coders were systematically identified, and Miles and Huberman’s reliability formula was applied. As a result, the level of agreement between the researcher and the expert was found to be 92%. This rate indicates a high level of agreement between coders, suggesting that the coding process was conducted with a consistent approach and that the analysis results were systematically interpreted rather than being solely dependent on subjective interpretation.

4. Results

This section presents the findings obtained from the interviews, first providing a descriptive account based on participants’ statements and then offering analytical interpretation to explain underlying patterns and mechanisms. It should be noted that the findings reflect participants’ perceptions and interpretations rather than objective or statistically generalizable outcomes. The demographic characteristics of the participants are provided first, followed by the themes and categories identified in the analysis, along with illustrative examples from relevant participant statements, to support transparency in the presentation of the findings.

4.1. Participant Profile

Descriptive statistics regarding the demographic characteristics of the participants are presented in

Table 1. Demographic Characteristics of the Participants.

Characteristic	Variable	f	%
Gender	Male	12	63.2
	Female	7	36.8
Age	21–30	4	21.1
	31–40	8	42.1
	41–50	7	36.8
Years of Work Experience	1–5 years	7	36.8
	6–10 years	9	47.4
	11–15 years	3	15.8
Years in Current Institution	1–5 years	14	73.7
	6–10 years	5	26.3
Educational Level	Master’s Degree	4	21.1
	Bachelor’s Degree	15	78.9
Title	Fund Manager	2	10.5
	Financial Analysis Specialist	3	15.8
	Investment Advisor	1	5.3
	Portfolio Manager	7	36.8
	Assistant Portfolio Manager	2	10.5
	Research Director	1	5.3
	Marketing and Strategic Planning Officer	1	5.3
	Business Development and Product Management Officer	1	5.3
	Product Manager	1	5.3
TOTAL		19	100

.

The participant group demonstrates diversity in terms of age, gender, professional title, work experience, tenure within their current institutions, and educational background. Participants’ ages range between 26 and 46, indicating that the sample includes both early-career professionals and experienced practitioners. Of the participants, 12 are male and 7 are female. Among professional titles, the most common position is portfolio manager; however, roles such as financial analysis specialist, assistant portfolio manager, and fund manager are also represented. Professional experience ranges between 2 and 15 years, while tenure in their current institutions varies between 1 and 9 years. With respect to educational background, 15 participants hold bachelor’s degrees, and 4 participants hold master’s degrees.

Overall, this distribution suggests that the sample reflects a group of professionals with varying levels of experience and expertise, which may contribute to the diversity of perspectives captured in the qualitative findings. In this sense, the diversity observed in the participant group provides a contextual background for interpreting how information overload is perceived in financial decision-making processes.

Themes

Even though five themes emerged in this study, in line with the primary objective of examining how information overload is perceived to influence decision-making processes, the themes of “Information Overload” and “Investment Decisions” were analyzed in greater detail. The remaining themes are reported at a summary level to provide contextual framing. The themes identified in the research, the categories forming these themes, and the results derived from them are summarized in

Table 2. Summary of Themes and Categories.

Themes	Categories	Results Derived from the Themes
Theme 1: Relevance	“Definitions of Relevant Information”, “Examples of Relevant Information”, “The Relevance of Information Presented in Financial Statements”, “Variation in Relevant Information by Stakeholder Type”	Participants emphasized decision-relevant elements such as profit/loss, cash flows, and debt structure, particularly in relation to forecasting and investment decision-making. Some disclosures were perceived as not contributing to the decision-making process. Perceptions of relevance were also found to vary depending on the purpose of the decision and the profile of the information user.
Theme 2: Materiality	“Definitions of Material Information”, “Examples of Material Information”, “The Materiality of Information Presented in Financial Statements”, “Variation in Material Information by Stakeholder Type”, “Factors Affecting the Materiality of Information”	Participants emphasized performance indicators such as gross sales profit, operating profit, net profit, cash flows, and sales as material for investment decisions. Some items were perceived as decisive, while others were considered secondary. Perceptions of materiality were also found to vary depending on stakeholder type and qualitative characteristics such as relevance, faithful representation, understandability, and timeliness.
Theme 3: Financial Statements and Notes	“Purpose of Preparing Financial Statements”, “Definitions of Notes”, “Presentation of Material and Relevant Information in Notes”	Participants associated financial statements with providing information and demonstrating performance. Notes were described as complementary components of financial statements. However, lengthy and highly technical note disclosures were perceived as complicating the decision-making process and, in some cases, contributing to information overload.
Theme 4: Information Overload	“Definitions of Information Overload”, “Examples of Information Overload”, “Information That Does Not Meet Relevance and Materiality Criteria”, “Reasons for Presenting Information Overload”, “The State of Information Overload in Türkiye”, “The Effect of Information Overload on the Understandability and Reliability of Financial Statements”, “Variation in Information Overload by Stakeholder Type”, “Legal Regulations Preventing Information Overload”, “The Role of Independent Auditing in Preventing Information Overload”	Participants described information overload as information that does not contribute to decision-making and creates unnecessary complexity. It was associated particularly with technical note disclosures and items not used in decision-making. Information that does not meet relevance and materiality criteria was also perceived as information overload. The regulatory framework and corporate image concerns were identified as key reasons for its presentation. Information overload was perceived as reducing the understandability and reliability of financial statements, with its perception varying by stakeholder type, and current regulations were considered insufficient to limit this issue.
Theme 5: Investment Decision	“Financial Statements and Financial Information Examined in Investment Decisions”, “Financial Statements and Financial Information Not Examined in Investment Decisions”, “Adequacy of Financial Statement Information for Investment Decisions”, “Effects of Information Overload on Investment Decisions”, “Effects of Information Overload on the Decisions of Other Stakeholders”	Participants highlighted the balance sheet, income statement, and cash flow statement as the primary financial statements used in investment decisions. Low-amount items and certain note disclosures were generally not examined. Although financial statements were considered sufficient, the growing importance of non-financial information was also emphasized. Information overload was perceived to negatively affect investment decisions by increasing decision difficulty, time costs, uncertainty, and risk perception. However, a limited number of participants indicated that higher levels of experience may mitigate these effects.

below, which provides a structured overview of the main patterns emerging from the data.

The thematic structure presented in Table 2 provides an overview of the findings obtained within the scope of this study. Beyond providing a descriptive classification, this structure is used to interpret how information overload may operate as a process that shapes how financial information is interpreted, prioritized, and evaluated, particularly in relation to risk-related judgments. In line with the main objective, the themes of “Information Overload” and “Investment Decision” were analyzed in particular detail. These two themes are interpreted together because they provide insight into how information density in financial reports may be perceived to shape the interpretation, filtering and prioritization of risk-relevant information under conditions of cognitive load. Within this framework, the analysis first addresses participants’ definitions and examples of information overload and then examines how participants perceive its association with investment decision-making processes. Taken together, the findings provide exploratory, mechanism-oriented insight into how information overload is experienced in relation to risk-sensitive financial judgment in institutional investment contexts.

4.2. Information Overload Theme

The “Information Overload” theme identified through the thematic analysis was examined in detail due to its direct relevance to the conceptual framework of the present study, particularly in relation to how information overload may be perceived to shape the interpretation of risk-relevant information. Even though several categories were identified under this theme, the categories of “Definitions of Information Overload” and “Examples of Information Overload” were analyzed in greater depth in line with the primary objective of the research, as they offer context-specific insight into how the phenomenon is perceived and experienced by participants. The remaining categories are presented in summary form in Table 2 and are considered supportive elements that help to the contextualize the analysis, particularly by illustrating how different dimensions of information overload relate to financial decision-making and the interpretation of risk.

4.2.1. Category of Definitions of Information Overload

One of the prominent categories frequently mentioned in the participants’ narratives is the definition of information overload, which is interpreted as reflecting how the phenomenon is conceptually understood by investors. To illustrate how this concept is structured within participants’ perceptions, the code map regarding the definitions of information overload is presented in Figure 2, which provides a visual representation of the conceptual structure underlying these perceptions.

The code frequencies shown in the code map indicate the number of participants who referred to each code; however, these frequencies are used only to describe recurring patterns in participants’ narratives and should not be interpreted as measures of statistical significance. The colors used in the MAXQDA visualizations were automatically assigned for visualization purposes only and do not carry any analytical meaning. This clarification applies to Figure 2, Figure 3 and Figure 4. It should be noted that there are no uncoded documents within the research findings and that some participants referred to more than one code in their narratives. Participants described information overload as information that does not contribute to the decision-making process, fails to generate value, may create complexity, and may be associated with increased perceptions of risk, suggesting that information overload may be perceived not only in relation to the quantity of information but also in terms of its usefulness. In these definitions, expressions such as unnecessary accumulation of information, valueless information, information bombardment, and information that may increase perceived risk were particularly emphasized. These descriptive patterns summarize how participants articulated the concept prior to the illustrative quotations presented below.

When the participants’ definitions of information overload are examined, Participant 17 stated, “A large quantity of information with little qualitative substance… You can think of it as something inflated like a balloon, voluminous but essentially empty. Information with little or no benefit”, suggesting that information overload may be perceived as high-volume but low-value information that offers limited decision relevance and may make it more difficult to distinguish decision-relevant signals within financial information. Similarly, Participant 15 stated, “Information overload is related with the scope of information. What comes to mind is unnecessary and non-beneficial information”, suggesting that information overload may be perceived as being associated with the breadth of information and may involve the presence of non-beneficial and unnecessary content that offers limited value for decision-making thereby referring to the codes of non-beneficial information and unnecessary accumulation of information. Participant 7 stated, “It can be described as the presentation of important information together with ineffective and insignificant information. For me, information overload may occur when the information that is important to me is hidden within a large and unnecessary mass of information in which insignificant information dominates”, suggesting that information overload may be perceived as a condition in which decision-relevant information becomes less visible within a large volume of low-value content, potentially making it more difficult to distinguish between important and insignificant information, thereby referring to the code of unnecessary accumulation of information. These descriptive patterns summarize how participants articulated the concept prior to the illustrative quotations presented below.

Participants described information overload as a phenomenon characterized by information bombardment, valueless information, unnecessary information, and information that may generate complexity and may be associated with increased perceptions of risk. This description suggests that information overload may be perceived not only in relation to the quantity of information but also in terms of its usefulness and its potential to influence the interpretation of risk-relevant signals. In this context, Participant 10 described information overload as “companies subjecting their stakeholders to an information bombardment”. This statement suggests that information overload may be perceived as an excessive flow of information directed at stakeholders. Participant 8 defined information overload as “valueless information. That is, it has absolutely no effect; therefore, it carries no informational value”. This statement suggests that information overload may be perceived not merely as an increase in the volume of information, but as the presence of information that lacks decision relevance, which may make it more difficult for participants to identify and prioritize useful financial signals within a broader information environment. These interpretations are based on participants’ reported experiences and should be understood as context-specific insights limited to the institutional investors included in this study rather than as generalizable conclusions.

Participant 2 drew attention to the unnecessary nature of such information by stating, “It is the presentation of information beyond what is necessary for everyone”. This observation may be interpreted as indicating that information overload may involve the inclusion of information that exceeds decision-making needs, which may contribute to difficulties in identifying relevant financial information. Participant 16 defined information overload as “information that becomes excessive to the extent that it turns the process into a problem. It suggests confusion and disorder”. This finding may indicate that information overload may be perceived as a condition in which excessive information introduces confusion and disorder into the decision-making process, potentially complicating the interpretation of financial information. Similarly, Participant 5 emphasized the risk dimension of information overload in the decision-making process by stating, “Information overload consists of information that contributes to increased perceptions of risk”. This perspective may point to how information overload may be perceived as being associated with heightened perceptions of risk, which may influence how financial information is interpreted under conditions of uncertainty. In this sense, these findings may be interpreted as indicating that information overload may be perceived as influencing how participants distinguish between signal and noise, potentially contributing to interpretive uncertainty in financial decision-making. These interpretations may also point to possible implications for portfolio risk assessment and the interpretation of financial information within the scope of participants’ experiences. From a contextual perspective, these perceptions may also be associated with the institutional and regulatory characteristics of the reporting environment, particularly in terms of how disclosure practices, reporting complexity, and audit requirements may shape the volume, structure, and interpretability of financial information encountered by participants.

4.2.2. Category of Examples of Information Overload

An examination of participants’ examples of information overload indicates that financial statement footnotes were frequently mentioned, particularly in relation to information perceived as lacking decision relevance and as being associated with cognitive burden and increased uncertainty in financial decision-making. In particular, certain details disclosed in footnotes, such as the opening dates of bank accounts and information related to tax payment dates, were described by participants as examples of information overload. In addition, participants described information presented in consolidated financial statements, certain disclosures included in independent audit reports, minor shareholdings, and statements regarding profit expectations as examples of information overload within their own professional decision-making contexts. These examples may suggest that information overload is perceived as being associated with disclosures that are characterized by excessive in detail but limited in decision value. This interpretation may indicate that such disclosures can create challenges for participants in identifying and prioritizing risk-relevant information. The codes of depreciation and tangible fixed assets appeared in participants’ narratives both within the scope of footnote disclosures and as independent elements. Accordingly, these codes were organized as separate sub-codes under the footnotes category and as distinct main codes within the broader category of examples of information overload.

Figure 3 presents the code map related to examples of information overload, providing a visual representation of how these examples are grouped and may be interpreted within participants’ accounts.

Figure 3. Code Map of Examples of Information Overload.

Figure 3. Code Map of Examples of Information Overload.

Participant 1, referring to the main code of footnotes, stated that the disclosure in the notes to financial statements of information related to the banks with which companies conduct transactions, such as the banks where deposits are held, the interest rates applied, and the maturity terms, could be considered examples of information overload within participants’ accounts, explaining: “Some companies, when explaining their cash balances, provide lengthy explanations in the notes to the statement of financial position about the banks where they hold their deposits, the interest rates, and the maturities”. This example suggests that such detailed disclosures are perceived as exceeding decision-making needs and contributing to informational complexity. Similarly, Participant 18 considered the inclusion of information such as the date on which companies opened accounts at banks as an example of information overload, stating, “Explanatory notes… regarding banks, what am I supposed to do with the date you opened a bank account?” This example may indicate that, from participants’ perspectives, certain disclosures may have limited practical relevance for decision-making.

Participant 3 stated that consolidated financial statements are excessively detailed and referred to them as an example of information overload by saying, “Consolidated financial statements are highly detailed statements; therefore, these tables are the first thing that comes to mind”. This example may be interpreted as suggesting that, from participants’ perspectives, the level of detail in consolidated financial statements may be perceived as exceeding practical decision-making needs. Participant 2 expressed a similar view regarding independent audit reports, stating, “Some of the information in audit reports. When you start examining these reports, you can see that a great deal of both necessary and unnecessary information is presented and that they are overloaded with details. It would be better if the audit opinion were presented more concisely as either positive or negative”. This example points to the possibility that, from participants’ perspectives, the level of detail in audit reports may be perceived as exceeding practical decision-making needs and may reduce the clarity of key evaluative signals. In this sense, these findings are consistent with the view that information overload may not only create cognitive burden but may also affect participants’ perceived ability to distinguish between relevant and irrelevant information, thereby potentially increasing uncertainty and perceived risk in financial decision-making. In this respect, such effects may be understood as having potential within the scope of participants’ experiences, rather than indicating broader market-level outcomes. These perceptions may also reflect features of the financial reporting setting, where the organization and presentation of disclosures, shaped by prevailing regulatory arrangements, may influence how information is processed and assessed by participants.

4.3. Investment Decision Theme

Although several subcategories were identified under the theme of “Investment Decision” during the analysis process, how information overload is perceived to be associated with investment decision- making constitutes the central problem in this study. In particular, this category provides insight into how information overload may be perceived as shaping participants’ evaluation of financial information, decision confidence, and the interpretation of risk-relevant signals. For this reason, the category “The Effect of Information Overload on Investment Decisions” was examined in greater analytical detail, while the other categories are presented in summary form in Table 2 to provide an overview of the thematic structure.

Category: The Effect of Information Overload on Investment Decisions

Figure 4 presents the code map regarding the effect of information overload on investment decisions, providing a visual representation of how participants’ accounts can be organized around perceived changes in decision processes, uncertainty, and perceived risk in financial decision-making.

Figure 4. Code Map Related to the Effect of Information Overload on Investment Decisions.

Figure 4. Code Map Related to the Effect of Information Overload on Investment Decisions.

Participants’ views regarding the impact of information overload on investment decisions can be organized into three participant-reported positions: those who believe that information overload has no effect on investment decisions, those who argue that it has a positive effect, and those who state that it has a negative effect. This variation in participants’ views may be interpreted as suggesting that the impact of information overload on investment decision-making is not perceived as uniform across participants, but may be associated with factors such as professional experience, information processing capacity, and the perceived relevance of financial information within participants’ accounts. In this sense, the findings may reflect that, within participants’ accounts, information overload is not uniformly perceived as a negative phenomenon, but may be understood in relation to participants’ experiences and contextual factors, contributing to a more nuanced understanding of its role in financial decision-making.

Participants who believe that information overload has no effect on investment decisions appear to base their views, from their own perspectives, on reasons such as the perceived absence of excessive disclosure in financial statements in Türkiye and their level of professional experience. Participant 3 stated that information overload had no effect on investment decisions, noting that “It has no effect. If you look at the financial statements of other countries, you will see more disclosures and footnotes. When you look at them, you realize that ours do not present information overload”. This statement may reflect the participant’s view that financial statements in other countries contain more information, and that financial statements prepared in Türkiye may not be perceived, within this perspective, as constituting information overload or as influencing investment. Similarly, Participant 18 emphasized their prior professional experience when describing their view, “I have been with this company for three years, but before that I also had banking experience. I was already familiar with investing before that. When I look at financial statements, I would rather have more information than less, because with too little information I might not be able to access what I need. Are there any negative aspects? For an experienced investor, I don’t think so. At most, I might spend a little more time searching for the information. But I would still make the same investment decision”. These statements may reflect that from participants’ perspectives, a high level of professional experience may be associated with an increased ability to filter and interpret financial information, which may be perceived as reducing the salience of potential difficulties related to information overload in decision-making and perceived risk.

These findings may be seen as indicating that, within participants’ accounts, information overload is not uniformly perceived as negative, but may be experienced differently depending on how information is processed and interpreted.

Participants who stated that information overload has a positive effect on investment decisions appeared to associate this view, with factors such as the ability to access necessary information, perceived transparency, and the opportunity to better understand the firm. Participant 2 described their view regarding the perceived positive aspects of information overload, stating, “At first, the term ‘information overload’ sounded like something negative. But when you think about it, it is not negative. It actually means that all the information I might need is laid out in front of me”. In this way, the participant can be understood as emphasizing that the presentation of extensive information is perceived as facilitating access to the information considered necessary for investment decision- making. Similarly, Participant 8 described a positive perception of information overload, noting, “I think its effect is positive. Having more information allows me to understand the company better. Corporate transparency increases and so does its credibility…” emphasizing that a greater volume of information may be perceived as facilitating a more comprehensive analysis of the company and as being associated with perceptions of transparency and reliability, suggesting that, from participants’ perspectives, increased information may be linked to reduced uncertainty and may support more confident decision-making. This can be viewed as reflecting that, for some participants, increased information is evaluated in relation to its perceived usefulness in supporting a more comprehensive understanding of the firm.

Many participants indicated that, from their perspectives, information overload may be associated with negative effects on investment decisions, particularly by increasing uncertainty, perceived risk, and the difficulty of interpreting financial information. This negative effect may reflect, within participants’ accounts, several dimensions, including increased difficulty in decision-making, time-related constraints, reduced understandability of financial statements, perceived declines in reliability, challenges in identifying the firm’s actual condition, and heightened uncertainty and risk. Participant 10 described a negative perception related to the difficulty of interpreting financial statements, stating, “…Since we would have difficulty understanding the financial statements, its effect would be negative when analyzing the company”. This observation can be read as reflecting participants’ views that extensive disclosure is perceived as reducing the comprehensibility of financial statements and complicating the decision-making process. Participant 13 described information overload as being associated with increased uncertainty and perceived risk, remarking, “For us it becomes like a risk factor. It may exceed the risk threshold we set, uncertainty emerges, and our projections drift away from our targets. The probability of incurring losses increases, and that is the worst part”. This observation may be understood as reflecting participants’ views that information overload is linked to heightened uncertainty and perceived risk exposure, without implying actual changes in loss probability. In this statement, the participant emphasized that information overload may be associated with an increased perception of potential losses in relation to heightened uncertainty and risk. Participant 5 described information overload as creating obstacles to interpreting financial information, stating, “I see too much information as an obstacle in front of me. It prevents me from seeing the real picture. With so much embellished information, I might assume the company is very profitable and make the wrong decision”. This statement appears to reflect that information overload may obscure the firm’s actual situation and increase the perceived risk of misinterpretation in investment decisions. This observation may be understood as reflecting participants’ views that information overload can obscure the firm’s actual situation and increase the perceived risk of misinterpretation in investment evaluation. Participant 1 expressed concerns regarding credibility and intent in relation to information overload, stating, “If there is information overload in a company’s financial statements, the company loses credibility. Whoever did that must have done it for a purpose, right? Is it a good purpose? It certainly doesn’t seem like it. It is something done to mislead people. Someone else will deceive investors and gain rent from it”. This statement can be read as indicating that, from participants’ perspectives, information overload may raise concerns about credibility and managerial intent, rather than indicating actual misleading practices. Through this statement, the participant appears to express concerns that information overload is perceived as raising concerns about credibility and may be perceived as potentially associated with misleading presentation, rather than indicating actual practices. A recurring element in participants’ narratives relates to the perceived increasing difficulty of the decision-making process. In this context, Participant 6 described a perceived increase in decision-making difficulty, stating, “It has a negative effect on my decision. Information overload means unnecessary information; because there is too much of it, it makes my job more difficult…” This observation points to participants’ perceptions that information overload can be associated with increased difficulty in processing financial information during decision-making. Overall, these findings can be approached as indicating that, within participants’ accounts, information overload, when associated with increased uncertainty and perceived risk, may be perceived as influencing the quality, accuracy, and confidence of investment decisions. In this sense, information overload may correspond to situations in which excessive and low-value information is perceived as making it more difficult to interpret financial signals, which may be linked to less confident or less certain decision outcomes within participants’ experiences. These effects may relate, within participants’ accounts, to considerations of portfolio risk assessment and the interpretation of financial information, rather than indicating broader implications for financial markets or systemic stability.

5. Discussion

Limited to the accounts of the participants included in the sample of this study, the participants’ narratives may reflect that the internationalization of capital markets is perceived as increasing the scope of information used in decision-making, which could be interpreted as transforming the financial reporting environment into a more intensive arena of information production. Within the specific professional context of the interviewed institutional investors, Grohmann (2018) emphasizes that digitalization and globalization may make investment decisions more challenging, while Sattar et al. (2020) note that the decision-making process can be perceived as increasingly complex due to the growing number of variables involved. As also indicated in the literature, the presentation of information overload in firms’ financial statements is perceived as a factor that may complicate the investment process; within the scope of the participants’ experiences, this situation is described as rendering decision-making more challenging and, in some cases, may lead to outcomes such as decision postponement or analysis paralysis.

When examining the findings obtained in this study, the participants’ narratives could be interpreted as reflecting a perception of information overload as a phenomenon involving information that is perceived to provide no benefit to information users, is described as rendering tasks more challenging, is interpreted as worthless and unnecessary, and increases the risks to which they are exposed, creates complexity, is not used in decision-making, exceeds the amount that should be presented, and constitutes insignificant information. In the literature, the concept of information overload is often discussed through various related notions, including information explosion, information bombardment, information noise, and cognitive load, which may provide a conceptual framework for interpreting the participants’ professional experiences. The Information Overload Hypothesis proposed by Miller (1956) provides a theoretical lens for exploring the perceived limited information-processing capacities of individuals, aligning with the cognitive challenges reported by the participants in this study. In alignment with this perspective, Hiltz and Turoff (1985) suggest that exposure to information exceeding perceived capacities may be associated with decision-making difficulties, while Klapp (1986) conceptualizes information overload as the potential degradation of information and the subsequent loss of its functional value. Within the context of its limited sample, this study uses these theoretical perspectives as a framework to interpret the participants’ subjective experiences regarding the ways in which excessive information may shape their professional focus. The theoretical framework established by Bawden et al. (1999) suggests that each additional piece of information provided during the information-processing process may begin to cause harm rather than benefit beyond a certain threshold, while Eppler and Mengis (2004) indicate that exposure to information above the optimal level can reduce decision quality, thereby offering a conceptual backdrop against which the subjective experiences of participants can be analyzed. Recent empirical contributions, such as Le et al. (2025), suggest that information overload could extend beyond individual cognitive strain to be viewed as a potential source of risk that influences investor sentiment, which theoretically points toward implications for market stability. In this sense, from the perspective of the participants, information overload is perceived not only to affect individual decision-making but is also suggested to have potential implications for how portfolio risk assessment or market efficiency are understood, rather than for the stability of financial systems. This theoretical framework finds appears to be reflected in the participants’ accounts, which characterize information overload as an internal cognitive barrier that manifests through increased task complexity, heightened confusion, and a diminished capacity to perceive the overarching financial reality. Finet et al. (2025) argue that financial decision processes are related not only to the level of access to information but also to how this information is perceived by investors. In this respect, the present research appears to qualitatively align with Finet et al. (2025) by highlighting the potential role of cognitive mechanisms, as perceived by participants, in the investment decision-making process. Building on this perspective, the present study aims to offer an exploratory insight into the existing literature by discussing how information overload might be experienced as a context-dependent phenomenon that may influence the way these specific participants interpret, prioritize, and respond to financial information under conditions of cognitive constraint.

When examining examples provided by the participants in this study, regarding information overload, it appears evident within their accounts that they particularly refer to the notes to financial statements, subjectively characterizing information that they perceive as having no direct impact on the investment decision process as information overload. Within the scope of the group of participants in this research the identification of footnotes as a primary example of information overload and the complaints regarding technical details perceived as unrelated to the decision-making process appear consistent with the rationale behind recent transformations in accounting standards. International Financial Reporting Standard 18 (IFRS 18) aims to reduce unnecessary detail in financial reporting, an approach that appears to reflect the specific criticisms raised by the participants regarding the complexity of the notes. Within the current reporting system, it is suggested that the increasing volume of footnote disclosures and their transformation into standardized boilerplate text may be perceived by investors as obscuring information that is critical for investment decisions. The exploratory findings of this study appear to be qualitatively consistent with the perspective of Bloomfield (2002), who suggests that market efficiency may be perceived as being affected as the cost of interpreting information increases. The specific accounts of the participants regarding cognitive burden of analyzing complex footnote details gain further interpretive meaning when viewed alongside Hirshleifer and Teoh (2003), who emphasize the importance of how information is perceived to be salient and understandable. Within this framework, presenting information in a way that reduces interpretation costs and enhances salience appears to be as a vital factor for preserving the rationality of their investment decisions, as perceived by our participants. Furthermore, the participants’ characterization of certain technical details in the footnotes as unnecessary shows a conceptual alignment with the “Excess Baggage” discussions (Saha et al., 2019), suggesting a shared concern regarding the volume of non-essential information. Mirroring the recommendations of ICAS and NZICA (2011) report Losing the Excess Baggage, it appears that our participants’ feedback supports a classification approach—such as “Keep”, “Delete”, and “Disclose if Material”—to enhance the clarity of the reporting system.

Within the context of the accounts provided by the participants in this study, it appears that many participants report perceiving negative consequences regarding the effects of information overload on their investment decision processes. The specific feedback from participants regarding firm credibility, time loss and time-related costs, and increased uncertainty and risk can be interpreted within the scope of this qualitative study as a manifestation of the hidden interpretive costs that our participants perceive as a hindrance to the interpretation of financial information and decision-making processes. Rather than being mere descriptive outcomes, these perceived barriers, such as the obscuring of a company’s true condition, may suggest a critical disconnect from the perspective of these investors between reporting volume and the qualitative understandability required for their rational decision-making processes. From a qualitative perspective, the experiences described by our participants appear to align with the theoretical frameworks of Bernales et al. (2023) and Kartini and Nahda (2021). While their studies emphasize objective decision accuracy and portfolio selection, our participants’ accounts appear to suggest that a high level of perceived risk and uncertainty may qualitatively mirror these difficulties in assessing the risk-return relationship within their individual decision-making contexts. Similarly, the accounts provided by our participants appear to reflect the findings of Le et al. (2025) who suggest that changes in investor sentiment may be associated with the propagation of market risk, emphasizing that the psychological and perceptual dimensions of financial decision-making are closely related to risk. The complexity reported in our study appears to be consistent with the Inverted-U Curve approach proposed by Schroder et al. (1967), suggesting that beyond a certain threshold the amount of information may increase complexity and may reduce the level of information processing for these investors. Aligning with Handoko et al. (2026), our findings appear to indicate that investment decisions are associated not only with access to information but also with the perceived ways in which investors process that information. Reflecting the concerns of our participants, Alm El-Din et al. (2022) emphasize that information overload may be used to conceal poor performance or profit manipulation, while the reported reduction in confidence may suggest an alignment with Eissa et al. (2024) and Finet et al. (2025) who suggest that intense information bombardment may reduce investor confidence and may weaken the rational decision-making process. Ultimately, the accounts from our participants suggest that information overload in financial reports may function not only as a cognitive constraint that may affect investment decisions, but also as a factor that, within their experience, may be associated with challenges related to the efficiency and transparency of financial markets. These findings may suggest that, from the perspective of our sample, the reporting system could be reconsidered. The findings may further suggest that even within our group of institutional investors, cognitive capacity limits appear to exist, indicating that professional expertise does not necessarily eliminate cognitive strain in the presence of information overload. From this perspective, the study contributes to the literature by offering an exploratory view that the financial reporting environment may be understood as a structural factor shaping investor behavior. In this sense, the study suggest that, for these participants, information overload may operate not only as a cognitive constraint but also as a process-level mechanism that may shape risk-sensitive financial decision-making. The strategic steps proposed in IFRS 18 and in the Excess Baggage report may therefore be interpreted by our participants as potentially important for addressing the problems caused by information overload. A reporting approach that focuses on the quality rather than the quantity of information may therefore be perceived by participants as potentially important for supporting more effective decision- making processes.

Overall, the findings of this study may suggest that information overload maybe understood not only as a disclosure-related issue but also as a process-level phenomenon that may shape risk-sensitive financial decision-making through cognitive and behavioral mechanisms. In this respect, the study aims to provide in-depth, context-specific insight rather than statistically generalizable claims.

6. Conclusions

Rapidly changing conditions driven by globalization appear to have led investors to require not only financial information but also non-financial information, thereby suggesting a need for the restructuring of reporting frameworks in a way that responds to investors’ evolving information needs. Although institutions engaged in the production and sale of information in financial markets (such as rating agencies) are intended to reduce information asymmetry, such market-based solutions may not always be perceived as producing fully effective outcomes, potentially due to the free-rider problem (Mishkin, 1996). Therefore, the problems associated with information overload may be perceived as too complex to be addressed solely through private information mechanisms. Moreover, mitigating the potential consequences of information overload may be facilitated through public regulation and the establishment of a state-supported information disclosure system. Regulatory requirements that compel firms to periodically disclose their financial statements to the public and to reveal private information may be considered public policy instruments designed for this purpose. In Türkiye, mandatory disclosures made through the Public Disclosure Platform under the provisions of the Capital Markets Law may be viewed as one of the primary mechanisms intended to meet the information needs of information users. Nevertheless, firms’ strategic disclosure behavior and reporting practices may make it difficult to fully address the problems caused by information overload. Dawd (2018) and Fuhrmann (2020) suggest that integrated reporting may offer a potential approach for addressing the challenges associated with information overload. According to this view, integrated reporting may allow firms to be evaluated within a holistic framework that presents both financial and non-financial information, thereby potentially contributing to a reduction in perceived information asymmetry and the accumulation of redundant information. In this context, strengthening the regulatory role of the Public Oversight Authority with respect to accounting standards may be considered important. Accounting and financial reporting standards may be supported by additional regulations governing their implementation. Furthermore, disclosure principles specific to the problem of information overload, such as materiality and decision usefulness, may be more explicitly integrated into existing standards, particularly in relation to recent developments such as IFRS 18, which emphasize the clarity and organization of financial disclosures.

Since initial public offering (IPO) prospectuses may be considered one of the primary sources of information in investors’ decision-making processes, the high density of information contained in these documents may be perceived as making it more difficult for investors to identify information that is truly relevant. Therefore, presenting decision-useful information more prominently in prospectuses and providing summary indicators related to corporate governance practices may be perceived as potentially helpful in reducing investors’ information processing burden.

Independent auditing may be considered one of the fundamental mechanisms that supports the fair presentation of financial statements and may indirectly contribute to reducing misleading reporting practices. However, the absence of an explicit framework within independent auditing standards that addresses the impact of information overload on decision usefulness may be perceived as a potential gap. Accordingly, introducing a principle-level statement that considers the effects of information overload on investment decisions within the context of audit risk assessment may be considered as a potential approach for addressing the challenges associated with information overload.

This research may suggest that information overload may be understood not only as an issue of reporting quality, but may also as a process-level phenomenon that may influence financial decision-making. Rather than reducing the quantity of information, restructuring information in a way that reduces cognitive load may be perceived as a potential behavioral mechanism that may support the quality of investment decisions. In this respect, the study contributes to the literature by providing context-specific behavioral insights from an emerging market setting focusing on how professional institutional investors interpret and respond to financial information under conditions of cognitive constraint, and may offer implications for financial reporting practices, particularly in relation to disclosure complexity and recent developments such as IFRS 18. These effects may have implications not only for individual decision-making but also for how risk is interpreted and evaluated within participants’ decision-making processes. This research reflects the subjective perceptions of a limited group of participants (n = 19) within a single emerging market context, and the findings are not intended for statistical generalization but rather to provide context-specific and in-depth insights into the experiences of institutional investors. The data were obtained solely from institutional investors, and conducting a gender-disaggregated analysis was not established as a primary objective of this study. Future studies are recommended to expand the sample to include individual investors and to conduct comparative analyses between the two groups, while also examining the effects of information overload from a gender perspective across different institutional and contextual settings. Future studies may complement these findings by employing quantitative or mixed-method approaches to examine the relationships identified in this study across larger samples and different contexts.