This report can highlight accounting entries that potentially have an incorrect tax code. An accounting entry will display on the exceptions report if it is assigned a tax code which is different from the tax code set on the nominal code it is posted to.
Find the VAT exceptions report at Reports > Accounts > More...
Every nominal code can be assigned a tax code, this indicates that every entry posted to that nominal code is expected to have that tax code applied, but it does not prevent postings using a different code. For example, the sales nominal code might be given the tax code T20, but when an order is invoiced the tax code is set as T5. This accounting entry will automatically be listed on the exceptions report.
An item on the exceptions report isn't necessarily wrong, it simply highlights the exception to the rule, it is up to you to decide if it is correct.