The Strategic Gap: How AI-Driven Timing and Complexity Shape Investor Trust in the Age of Digital Agents

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Authors: Krishna Neupane
Cited by: 0

Abstract

Traditional models of market efficiency assume that equity prices incorporate information based on content alone, often neglecting the structural influence of reporting timing and cadence. This study introduces the Autonomous Disclosure Regulator, a multi-node AI framework designed to audit the intersection of disclosure complexity and filing unpredictability. Analyzing a population of 484,796 regulatory filings, the research identifies a structural Strategic Gap: a state where companies use confusing language and unpredictable timing to slow down how fast the market learns the truth by 60%. The results demonstrate a fundamental computational asymmetry in contemporary capital markets. While investors are now good at spotting "copy-paste" text, they remain vulnerable to strategic timing that obscures structural deterioration. The framework isolates 39 high-priority failures where the convergence of dense text and temporal surprises facilitated significant information rent extraction by insiders. By implementing a recursive agentic audit, the system identifies a cumulative welfare recovery potential of over 360\% and demonstrates near-perfect resilience against technical data interruptions. The study concludes by proposing a transition toward an agentic regulatory state, arguing that as information integration costss rise, infrastructure must evolve from passive data repositories into active auditing nodes capable of real-time synthesis to preserve market integrity.

Fields of Study & Subjects

Auditing Earnings Management Governance Financial Markets and Investment Strategies Financial Reporting and XBRL

Publication details

Journal / source
arXiv (Cornell University)
Publication date
19 February 2026
Language
EN
Document type
Preprint