Which of the following is a likely outcome of a detailed variance report?

A detailed variance report provides an analysis of differences between budgeted figures and actual results. When this report is carefully analyzed, it allows management to identify areas where performance was not aligned with expectations. This identification is critical because it highlights specific deviations from the plan, whether they are positive or negative. By pinpointing these areas, management can implement corrective actions to address underperformance or to capitalize on overperformance.

For instance, if the report reveals that actual expenses exceeded budgeted amounts in certain departments, management can investigate specific causes for these variances and take necessary steps, such as reducing costs or reallocating resources. Similarly, if revenues in a particular segment are underperforming compared to projections, targeted strategies can be developed to improve that segment's performance.

The other outcomes listed, while they can occur in different contexts, do not directly stem from the objective of a variance report. A reduction in overall business revenues may be a consequence of various factors, but it is not a guaranteed or direct result of analyzing variance reports. Increased complexity in financial reporting is not an intended outcome; rather, variance reports aim to simplify decision-making by clearly presenting data. Lastly, while discrepancies in cash flows can be highlighted in a variance report, the primary function of such a report is