From Disclosure to Cognitive Transparency: Toward a Behavioral Architecture of Reporting as a Decision-Shaping System – Evidence from Egypt

Purpose: This study challenges the traditional assumption that expanding disclosure automatically improves transparency and decision quality. It introduces the concept of Cognitive Transparency, reconceptualizing disclosure not merely as an information-providing mechanism but as a decision-shaping system that influences how users interpret information, form judgments, and make decisions. The study therefore proposes a behavioral perspective that views reporting systems as cognitive architectures shaping decision processes rather than passive channels of information transmission. Methodology / Approach: The research develops a conceptual and empirical framework explaining how disclosure design affects decision outcomes through cognitive mechanisms. Drawing on behavioral accounting and cognitive information-processing theories, the framework models the relationships among cognitive clarity, cognitive load, interpretive alignment, decision confidence, and decision quality. The framework is empirically examined using data from firms included in the EGX30 index, representing the most active companies in the Egyptian capital market. Structural modeling techniques are employed to analyze how disclosure structures influence cognitive processing and decision outcomes. Findings: The findings indicate that disclosure effectiveness depends primarily on cognitive mechanisms rather than disclosure volume alone. Well-designed reporting structures enhance cognitive clarity while reducing cognitive load, thereby improving interpretive alignment among users. These processes strengthen decision confidence and ultimately lead to higher decision quality and stronger institutional trust. The results suggest that transparency emerges from the cognitive architecture of reporting systems, not merely from the availability of information. Originality and Implications: The study introduces Cognitive Transparency Theory, integrating disclosure research with behavioral accounting and cognitive decision theory. The findings provide regulators and reporting institutions with insights into how disclosure systems can be redesigned to enhance interpretability, reduce information asymmetry, and strengthen institutional trust, particularly within emerging capital markets.