Exception reports

I do not think (b) is correct. For example, exception reports can report:

An employee who has submitted a large overtime claim.
A Cr balance on a receivables ledger.
A line of inventory which has had no sales for 6 months.

All of these are worth investigating (they are exceptional) but none would be part of any budget so answer (b) [“The analysis of those items where performance differs significantly from standard or budget”] would not cover them.

However, answer (a) [The reporting of unusual events, outside the normal course of events] does. In fact answer (a) embraces answer (b) because a significant departure from budget is (or should be) an unusual event.