Journal Article

A Model for Users' Understanding of Information Overload in Financial Reporting

Babazadeh, Ali, Kanani, Akbar, Salteh, Heydar Mohammadzadeh, Hejazi, Rezvan

2026

Overview

Objective: This study develops a systematic model for users' understanding of information overload in financial reporting, using grounded theory. The statistical population consists of professional experts and capital market participants, with 13 individuals selected through snowball sampling. Managing information overload is crucial for enhancing the usefulness and reliability of financial reports and supporting decision-makers. Methodology: Data were collected via semi-structured interviews and analyzed through three coding stages–open, axial, and selective–using MaxQDA software. The coding process identified patterns, categories, and relationships consistent with grounded theory principles. Results: The analysis produced macro-categories, main categories, and subcategories describing the causes, influences, and consequences of overload. Findings indicate that excessive or complex disclosures cause misinterpretation, raise information asymmetry, reduce market liquidity, increase transaction costs, and elevate capital costs. These outcomes underline the urgency of implementing effective controls over disclosure practices to safeguard report clarity and usefulness. Innovation: Few national or international studies examined the detailed patterns of overload in financial reporting. The model is original, integrating practical and theoretical contributions. It offers recommendations for policymakers, auditors, and preparers to reduce overload, improve comprehension, enhance decisions, and raise reporting quality, while linking behavioral insights with technical aspects of disclosure. Keywords: Information overload, Financial reporting, Disclosure, Grounded theory.

• Publisher: University of Tehran, Farabi College
• Subject: Financial disclosure / Information management / Management / Methods