SC-900 Microsoft Security Compliance and Identity Fundamentals Questions and Answers

Microsoft’s SCI documentation explains that Information Barriers (part of Microsoft Purview and enforced across Microsoft Teams, SharePoint, OneDrive, and Exchange) are used to “restrict communication and collaboration between specific groups of users to avoid conflicts of interest or to comply with regulatory obligations.” Policies define which segments can communicate and which must be blocked, and they control chat, channel conversations, meetings, file sharing, and e-discovery visibility between the defined segments. Typical scenarios include preventing communication between investment banking and research, or between merger deal teams and the rest of the organization. This is fundamentally different from other features: Sensitivity label policies classify and protect content but do not block who can talk to whom; Customer Lockbox manages Microsoft engineer access to customer data during support; and Privileged Access Management (PAM) limits admin task approvals and elevated operations, not end-user communication. When the requirement is to “restrict communication and the sharing of information between members of two departments,” Microsoft prescribes Information Barriers as the purpose-built capability to enforce those restrictions across collaboration workloads.

Microsoft’s SCI/Learn content describes Azure AD (now Microsoft Entra ID) as a cloud service, not something you install on-premises. The docs state Azure AD is a “cloud-based identity and access management service” that “helps your employees sign in and access resources.” This clarifies the third statement (IAM service) as Yes, and the first statement (on-premises deployment) as No, because the native on-prem directory is Windows Server Active Directory, whereas Azure AD runs in Microsoft’s cloud and can be synchronized with on-prem AD via tools like Azure AD Connect.

Microsoft also explains licensing/availability: the service comes in several editions, and the free/Office 365 tier is included with many suites. The documentation explicitly notes that Azure AD is “included with subscriptions such as Microsoft 365” (formerly Office 365) and provides tenant-wide identity for those services. Therefore, stating that Azure AD is provided as part of a Microsoft 365 subscription is Yes.

In summary: Azure AD/Entra ID is a cloud identity and access management platform; it’s not deployed on-premises, and Microsoft 365 subscriptions include an Azure AD tenant/edition to manage users, groups, apps, and access policies.

Microsoft’s SCI guidance defines the supported passwordless methods in Entra ID (Azure AD). The documentation states: “Microsoft recommends three passwordless authentication options: Windows Hello for Business, FIDO2 security keys, and the Microsoft Authenticator app (phone sign-in).” Windows Hello for Business “replaces passwords with strong two-factor authentication on Windows devices,” allowing users to sign in with a gesture (biometric or PIN) that does not require a password during interactive sign-in. Likewise, “FIDO2 security keys enable users to sign in using an external security key,” providing a standards-based passwordless credential that can work across supported browsers and devices.

By contrast, OATH software tokens (for example, time-based one-time passcodes in an authenticator app) are documented as multifactor verification methods: “OATH software tokens generate time-based codes used for MFA.” These OTP codes serve as a second factor and are not a passwordless primary sign-in method; users typically still enter a password and then the OTP. Therefore: software tokens → No (not passwordless), Windows Hello → Yes, FIDO2 security keys → Yes. This mapping aligns directly with Microsoft’s Entra ID passwordless authentication guidance and the delineation between passwordless sign-in and MFA second-factor methods.

The Compliance score in Microsoft Purview Compliance Manager is a measurement tool that evaluates an organization’s progress toward meeting data protection and regulatory compliance requirements. It is specifically designed to help organizations reduce risks related to data governance, privacy, and compliance with various standards such as GDPR, ISO 27001, NIST 800-53, and Microsoft Data Protection Baselines.

According to Microsoft’s official documentation on Compliance Manager, the Compliance score “helps organizations track, improve, and demonstrate their compliance posture by providing a quantifiable measure of compliance with regulations and standards.” Each action within Compliance Manager contributes a certain number of points to the overall score. These points are weighted based on risk, meaning that actions with a greater impact on reducing compliance risk contribute more significantly to the total score.

The score is not an absolute measure of legal compliance but rather an indicator of progress toward implementing recommended controls and risk-reducing actions. Microsoft emphasizes that Compliance score “assists organizations in identifying areas of improvement, prioritizing compliance tasks, and maintaining an auditable record of their compliance activities.”

By contrast, Microsoft Secure Score measures security posture related to identity, device, and application protection, while Productivity Score evaluates collaboration and technology experience. Thus, the metric that specifically assesses data protection and regulatory compliance progress is the Compliance score in Microsoft Purview Compliance Manager.

In Microsoft Purview Information Protection, pre-trained (Microsoft-provided) trainable classifiers are designed to automatically recognize specific categories of content by learning from examples rather than relying only on patterns or keywords. Microsoft’s guidance explains that trainable classifiers “look for data by learning from examples,” and that Microsoft supplies a catalog of “pre-trained classifiers that you can use immediately in your tenant.” The documentation explicitly lists content types these classifiers can recognize, including “Resumes,” along with other categories such as Source code, Threat and harassment, and more. Because they’re already trained by Microsoft, you can use them “to identify and classify items across SharePoint, OneDrive, and Exchange,” and then take actions such as auto-labeling or enforcing DLP policies based on the classifier match.

By contrast, Content explorer is a reporting tool that lets you view where sensitive info types/labels were found; it doesn’t identify resumes on its own. Activity explorer shows events like DLP policy matches over time. eDiscovery is used for legal hold, search, and review, not for semantic content identification. Therefore, to identify documents that are employee resumes, the correct Microsoft compliance feature is the pre-trained (Microsoft-provided) trainable classifier for Resumes.

Microsoft’s official description of Azure Key Vault in the Security, Compliance, and Identity learning materials states that Key Vault is “a cloud service for securely storing and accessing secrets.” The same guidance clarifies that “a secret is anything you want to tightly control, such as API keys, passwords, or connection strings.” In addition to secrets, Key Vault provides key management: “Azure Key Vault helps safeguard cryptographic keys and secrets used by cloud applications and services.” It further explains that organizations can “generate, import, rotate, disable, and delete keys” and use them for operations such as “encrypt and decrypt, sign and verify, wrap and unwrap.” These excerpts confirm that Key Vault’s core capabilities include the secure storage and lifecycle management of secrets and cryptographic keys.

By contrast, the SCI content makes clear that infrastructure features like Azure DDoS Protection and Network Security Groups (NSGs) are networking/security controls delivered by Azure networking services, not Key Vault. Likewise, ARM templates are deployment artifacts stored in repositories such as Azure Repos or GitHub; Key Vault does not store or manage template files. Therefore, the two correct actions you can perform with Azure Key Vault—aligned with Microsoft’s documentation—are to store (and manage) keys and store (and manage) secrets.

Microsoft Purview Compliance Manager is designed to give organizations a continuous view of their compliance posture. In Microsoft’s Security, Compliance, and Identity guidance, Compliance Manager is described as a capability that assesses your compliance posture against regulatory standards and data protection baselines and updates the compliance score as you implement or fail controls. The platform aggregates signals from assessments, controls, and improvement actions, then recalculates your compliance score as evidence is collected and actions are marked complete or tested. Because these evaluations are tied to live improvement actions and mapped controls (such as access, data protection, and governance controls), your organization’s status isn’t limited to a fixed reporting cycle; rather, it reflects ongoing progress and gaps across supported regulations and standards.

SCI study materials also emphasize that the score is not a one-time audit: it’s a running indicator of risk reduction and control implementation. As you address recommendations, add or update evidence, or connect automated tests where available, the score and related dashboards refresh to show the latest compliance state. This makes Compliance Manager suitable for continuous assessment, enabling organizations to monitor posture, prioritize work, and demonstrate incremental improvements over time—hence, it assesses compliance data continually for an organization.

Security Center

Microsoft’s shared-responsibility model states that the cloud provider secures the cloud, while the customer secures what they put in the cloud. The Azure Security documentation explains: “Regardless of the type of deployment, you always retain responsibility for your data, endpoints, accounts, and access management.” This applies to IaaS, PaaS, and SaaS, so statement 3 is Yes because the organization is always accountable for the security of information and data.

For SaaS, Microsoft describes that customers “don’t manage or control the underlying cloud infrastructure—including network, servers, operating systems, or even individual application capabilities” and that the provider handles service maintenance and updates. In SaaS, tasks like patching or applying service packs to the application code are owned by the service provider, while the customer focuses on data, identity, and access. Therefore, statement 1 is No.

For IaaS, Microsoft notes the provider manages the physical estate: “Microsoft is responsible for the physical hosts, network, and datacenter facilities,” while the customer configures and secures the guest OS, applications, and network controls within their subscription. Thus, managing the physical network is the cloud provider’s duty, making statement 2 Yes.

These SCI principles are foundational to Microsoft Learn/Docs guidance on Azure’s shared responsibility: provider—“security OF the cloud”; customer—“security IN the cloud,” with data protection always remaining the customer’s responsibility.

Sensitivity labels can apply content markings (headers, footers, and watermarks) to documents and emails, and can also enforce encryption and access controls. When configuring a label, you can specify the watermark text, size, and placement so that protected content is visibly marked according to your organization’s policy.

Microsoft’s Identity Protection provides risk-based detections and automated policies—not group management. Microsoft Learn explains that Identity Protection “uses detections to identify potential vulnerabilities affecting your organization’s identities” and exposes user risk and sign-in risk for policy decisions. It does not support adding users to groups by “risk level”; group membership is handled by static or dynamic rules based on directory attributes, while risk is a transient signal surfaced to policies.

Identity Protection includes specific detections such as “Leaked credentials”, where Microsoft’s threat intelligence finds credentials “on the dark web or other dumps,” and flags the affected account as risky. This directly confirms the ability to detect whether credentials have been exposed publicly.

For enforcement, Identity Protection policies and Conditional Access can require stronger authentication when risk is present. The documentation states that you can configure policies to “require multi-factor authentication for sign-ins assessed as risky” and use Conditional Access conditions like User risk or Sign-in risk with the grant control Require multi-factor authentication. Thus, Identity Protection signals can invoke MFA based on risk, but they do not place users into groups.

Microsoft documents describe Azure Bastion as a managed PaaS jump-host that’s deployed inside a virtual network to provide secure remote access: “Azure Bastion is deployed in your virtual network and provides seamless RDP and SSH connectivity to your virtual machines directly in the Azure portal over SSL.” The platform design is per-VNet, with the limit stated as: “One Bastion host can be deployed per virtual network,” ensuring a single managed entry point for that network. Connectivity is delivered using the native protocols while avoiding public exposure: “Bastion enables RDP and SSH sessions… without requiring a public IP on your virtual machines, using TLS (port 443).” Access is brokered through the web experience: “You connect to the VM directly from the Azure portal using your browser,” which provides an HTML5 client for RDP/SSH. These statements collectively validate that (1) deployment is one Bastion per VNet, (2) it provides secure user connections by using RDP (and SSH), and (3) it provides a secure connection to an Azure VM via the Azure portal, aligning with Zero Trust principles by eliminating inbound RDP/SSH exposure on public IPs.

In Microsoft guidance, network segmentation and isolation are core security principles. Azure virtual networks (VNets) are “a fundamental building block… that enable isolation and segmentation of resources,” and multiple VNets are commonly used to separate environments, business units, or security boundaries. This aligns with Zero Trust and SCI guidance that recommends isolating workloads to reduce blast radius and to apply least privilege and policy-based controls per boundary. Microsoft also emphasizes governance alignment, stating that enterprises should structure Azure resources so that policies, RBAC, and compliance requirements can be applied at appropriate scopes (management group, subscription, resource group, or network boundary). Deploying multiple VNets supports these goals by enabling per-environment policy assignment (for example, dev/test vs. production), differentiated security controls (such as NSGs, ASGs, and firewalls), and independent address spaces to prevent overlap across organizations or regions. Options A and D are not primary drivers: budgeting is handled at subscription/resource group scopes rather than VNet count, and a single VNet can already host and connect many resource types; creating multiple VNets is therefore primarily about governance and isolation that reduce risk and enforce organizational policies.

When you register an application through the Azure portal, an application object and service principal are automatically created in your home directory or tenant.

Microsoft’s Conditional Access (part of Microsoft Entra ID) evaluates multiple signals to make access decisions. The official description lists typical signals such as “user or group membership, IP location information, device state, application, and real-time risk.” The device state element explicitly refers to conditions like “compliant or hybrid Azure AD joined devices,” allowing policies that grant or block access—or require extra controls—based on whether a device meets compliance/registration requirements.

Regarding evaluation timing, Microsoft’s guidance states that Conditional Access “policies are enforced after the first-factor authentication is completed.” This means the engine needs the user’s primary sign-in context (who the user is and how they authenticated) to evaluate the conditions and then decide whether to allow, block, or require additional controls. Therefore, the statement that policies apply before first factor is not correct.

Finally, Conditional Access includes grant controls such as “Require multi-factor authentication,” and policies can be scoped to specific cloud apps or actions. As a result, you can target a particular application and require MFA when a user attempts to access it, satisfying application-specific risk mitigation while preserving user productivity.

 Security defaults require an Azure Active Directory (Azure AD) Premium license. No

 Security defaults can be enabled for a single Azure Active Directory (Azure AD) user. No

 When Security defaults are enabled, all administrators must use multi-factor authentication (MFA). Yes

Microsoft explains that Security defaults are baseline identity protections that are “available to all tenants at no additional cost” and are intended to “help protect your organization from common identity-related attacks.” They are a tenant-wide setting: Microsoft states that security defaults are “either on or off for the entire tenant” and “can’t be customized or targeted to specific users or groups.” If you require per-user or granular targeting, Microsoft directs customers to use Conditional Access policies instead.

A core behavior of security defaults is enforcing MFA: “All users are required to register for Azure AD Multi-Factor Authentication,” and “administrators are required to perform MFA.” In addition, security defaults “block legacy authentication” and apply other baseline requirements, but they do not enable premium features such as Azure AD Identity Protection or PIM. Summarizing the implications for the statements: no premium license is required; you cannot enable security defaults for just one user because the control is global; and when enabled, administrators must use MFA, with Microsoft recommending exclusion only for a break-glass account if necessary.

In Microsoft Defender for Office 365, Threat Trackers (also known as threat analytics in the security portal) surface curated intelligence on prevailing and emerging cyberthreats, giving security teams insight into current campaigns, affected regions, and recommended actions. Threat Explorer (Explorer/Real-time detections) is the investigation workspace that provides near real-time visibility into detected phishing, malware, and other malicious email content, allowing analysts to identify, filter, and analyze recent threats and take remediation actions (e.g., purge messages). Anti-phishing protection is configured via anti-phishing policies and uses machine learning and impersonation settings (user and domain impersonation) to detect and block impersonation attempts and other phishing techniques in Exchange Online. Together, these capabilities map directly to the statements: Trackers = intelligence on active threats, Explorer = real-time analysis and reporting, and Anti-phishing = detection of impersonation.

Microsoft positions Compliance Manager as a capability available inside the Microsoft 365 Compliance Center (now Microsoft Purview compliance portal). In Microsoft’s SCI learning content, Compliance Manager is described as the centralized workspace in the compliance portal that “helps you manage your organization’s compliance requirements,” providing a compliance score, pre-built and custom assessments, and improvement actions you track and assign. The documentation explains that admins “use the Microsoft 365 Compliance Center to access Compliance Manager,” where they can review the score, map controls to regulations and standards, and manage evidence and testing of controls. It also clarifies that Compliance Manager is surfaced directly in the compliance portal navigation, enabling authorized roles (such as Compliance Administrator, Global Administrator, or Compliance Data Administrator) to open the Compliance Manager blade to create or view assessments, assign actions, and review detailed guidance. By contrast, the Microsoft 365 admin center focuses on tenant, billing, and user management; the Microsoft 365 Defender portal focuses on security operations and threat protection; and the Microsoft Support portal is for service requests. Therefore, the direct and intended entry point for Compliance Manager is the Microsoft 365 Compliance Center.

Microsoft defines Microsoft Entra ID (formerly Azure Active Directory) as “a cloud-based identity and access management (IAM) service” that “helps your employees sign in and access resources.” In SCI learning paths, Entra ID is positioned as the tenant’s identity provider (IdP) that authenticates users and issues tokens for applications using standards such as OpenID Connect, OAuth 2.0, and SAML, which applications then use to authorize access based on roles/claims. Microsoft further explains that Entra ID provides single sign-on, Conditional Access, MFA, and token-based authorization—all core IdP capabilities that govern who can access what across Microsoft 365, Azure, and thousands of SaaS apps.

By contrast, an extended detection and response (XDR) system refers to Microsoft Defender XDR, which focuses on incident detection, correlation, and response—not identity provisioning or token issuance. A security information and event management (SIEM) system refers to Microsoft Sentinel, which aggregates and analyzes logs and alerts—not primary authentication. An Azure management group is a governance scope used to organize subscriptions and apply policy/RBAC at scale; it is not an authentication/authorization service. Therefore, within Microsoft’s SCI scope, Microsoft Entra ID is an identity provider used to perform authentication (verifying identity and issuing tokens) and to enable authorization in applications and resources that consume those tokens.

Microsoft 365 Endpoint Data Loss Prevention (Endpoint DLP) extends DLP controls directly to supported desktops. Microsoft states: “Endpoint DLP extends the activity monitoring and protection capabilities of DLP to Windows 10 (and later) devices.” The platform coverage is explicitly broadened to Apple desktops: “Endpoint DLP for macOS enables the same set of DLP capabilities on macOS devices (supported versions) so you can monitor and protect sensitive items across Windows and Mac endpoints.” At the same time, Microsoft clarifies the mobile scope: “Endpoint DLP is supported on Windows and macOS devices.” This means Android is not a supported operating system for Endpoint DLP (mobile data protection on Android uses different controls such as app protection policies via Microsoft Intune and conditional access). Therefore, the correct pairing of operating systems for Endpoint DLP support is Windows 10 and newer, and macOS—not Android. This aligns with Microsoft’s Endpoint DLP platform support guidance and the intended desktop-focused endpoint protections for activities such as file copy, print, upload, and removable media interactions.

multi-factor authentication (MFA)

In Microsoft Entra ID (formerly Azure AD), Security defaults are a baseline of recommended identity protections that, when turned on, automatically apply tenant-wide. Microsoft’s guidance explains that security defaults “help protect your organization with preconfigured security settings” and specifically require that “all users register for Azure AD Multi-Factor Authentication.” When enabled, the defaults enforce MFA challenges for users and admins during risky or sensitive operations, and they block legacy authentication protocols that can’t satisfy modern MFA requirements. Microsoft further notes that security defaults “provide basic identity security mechanisms… such as requiring multi-factor authentication for all users and administrators.” These controls are designed to raise the overall security posture without custom policy design, which is ideal for small and medium organizations or any tenant that hasn’t yet implemented Conditional Access. Therefore, when you enable security defaults, MFA is enabled for all Azure AD users, driving strong authentication as the default and reducing account-takeover risk stemming from password-only sign-ins.

In Microsoft 365, Data Loss Prevention (DLP) policies are designed to “help you identify, monitor, and automatically protect sensitive information” across services such as Exchange Online, SharePoint Online, OneDrive, and Microsoft Teams. Microsoft’s guidance explains that DLP uses sensitive information types—including built-in classifiers like Credit Card Number—to detect when content matches a defined pattern and then enforce protective actions. With DLP, you can create rules that trigger when email messages contain customer lists with credit card numbers, and choose actions to block the message, restrict access, or notify and educate users via policy tips and incident reports. Microsoft further notes that DLP “prevents the accidental sharing of sensitive information,” can require user justification to override, and supports granular conditions (e.g., number of matches, recipients internal vs. external) to ensure that only risky transmissions are stopped. By applying a DLP policy to Exchange with the Credit Card Number sensitive info type, an organization can block or quarantine outbound mail that includes those numbers, thereby reducing regulatory and data-exposure risk. Other options listed—retention policies, conditional access, and information barriers—serve different purposes (data lifecycle, access/authentication conditions, and restricting communication between groups) and do not inspect message contents for sensitive data. Hence, DLP policies are the correct control to restrict sending emails that contain customer lists and associated credit card numbers.

Microsoft 365 Advanced Audit is a capability of the Microsoft Purview audit solution that enhances auditing by adding additional high-value audit events, extended retention (up to one year by default, longer with add-ons), and intelligent insights. Microsoft documentation explains that Advanced Audit provides Exchange-specific events such as “MailItemsAccessed” and “SearchQueryInitiated”, which log when users access mailbox items and when they initiate a search in Exchange (including Outlook on the web). These records include who performed the action, when it occurred, the client/app used, and other metadata that helps investigations and forensics.

Advanced Audit is not a billing tool; billing information is handled separately in Microsoft 365 admin/billing portals and isn’t part of the audit schema. Likewise, audit logs do not expose message content; they capture activity metadata (actor, operation, workload, timestamp, and parameters) rather than the actual body of emails or file contents. The purpose is to improve auditability and investigation without revealing user content. Therefore, statements about viewing billing details or email contents are No, while identifying mailbox search actions (e.g., a user using the Outlook on the web search bar) is Yes, because Advanced Audit includes the SearchQueryInitiated (Exchange) event that records such activity.

Microsoft’s Security, Compliance, and Identity materials describe Azure Policy as the governance service that lets you “create, assign, and manage policies” so resources “stay compliant with your corporate standards and service level agreements.” Policies are enforced through effects such as Deny, Audit, Append, AuditIfNotExists, DeployIfNotExists, and Modify, which enable organizations to block non-compliant creations, append required settings, or deploy configuration automatically at the time of creation. The documentation further explains that Azure Policy “supports remediation of existing resources” by running remediation tasks for policies that use DeployIfNotExists or Modify, allowing Azure Policy to automatically bring resources into compliance without manual intervention.

Evaluation is continuous, not only at create or update time. Azure Policy “evaluates resources at deployment and regularly re-evaluates compliance,” and admins can also trigger on-demand scans. This means compliance state is updated both when a resource is created/changed and during periodic background assessments, ensuring drift is detected and corrected. Together, these capabilities allow Azure Policy to enforce standards for new resources, auto-remediate existing ones, and provide ongoing compliance posture—which is why the first two statements are Yes, while the claim that evaluation occurs only on create/modify is No.

Microsoft states that Identity Protection is used to “detect potential vulnerabilities affecting your organization’s identities, configure automated responses, and investigate suspicious actions related to your organization’s identities.” It evaluates user risk and sign-in risk using detections such as “leaked credentials, anonymous IP address, unfamiliar sign-in properties, [and] impossible travel.” These built-in detections confirm that the service can detect whether valid user credentials have been found in public or criminal datasets—commonly referred to as leaked credentials—thereby reducing identity compromise risk.

Identity Protection includes policy controls that “automate the response to detected risks,” specifically the User risk policy and Sign-in risk policy. Microsoft describes that these policies can “require password change when user risk is detected” and “require multi-factor authentication when sign-in risk is detected.” Therefore, Identity Protection can invoke MFA based on risk as part of Conditional Access–backed risk policies.

However, Identity Protection does not perform group lifecycle management. Microsoft positions group membership automation under Azure AD dynamic groups/Identity Governance, not Identity Protection. Consequently, adding users to groups based on risk level is not a function of Identity Protection, which focuses on detection, risk evaluation, and policy-driven remediation (e.g., MFA or password reset), not group assignment.

In Microsoft Sentinel, Logic Apps are used as playbooks for automation and orchestration (SOAR)—to take actions after alerts/incidents occur (notify, enrich, remediate). They are not the component that detects or identifies anomalies; detections come from analytics rules, UEBA (user and entity behavior analytics), Fusion (ML-powered correlation), and anomaly rules. Workbooks are interactive dashboards and visualizations for monitoring and reporting; they don’t correlate alerts. Correlation of alerts into incidents is handled by analytics rules (including alert grouping and Fusion) within Sentinel’s detection pipeline. Finally, Sentinel’s Hunting experience provides KQL-based queries and templates that are mapped to the MITRE ATT&CK tactics/techniques, enabling analysts to explore threats in a framework-aligned way. Thus, automation via Logic Apps ≠ anomaly detection; Workbooks ≠ incident correlation; Hunting tooling does align to MITRE ATT&CK.

In Microsoft identity and access scenarios, federation is explicitly defined as a mechanism to create trust between autonomous organizations so that identities authenticated in one can be accepted by another. Microsoft describes this as: “Federation is a collection of domains that have established trust.” In a federation, “this trust relationship lets each organization accept the other’s user authentication” and enables access to resources without the need to duplicate user accounts or require separate credentials. Within Azure AD/Microsoft Entra and AD FS guidance, Microsoft further explains that federation enables “claims-based access across security boundaries” and “allows users to access applications in a partner organization using their existing credentials.” These statements underline that the purpose of federation is to establish a trust relationship across identity providers or directories, not to provide multi-factor authentication, synchronize accounts, or build network tunnels. MFA is an authentication strength that can be applied on top of federated sign-in, user account synchronization is handled by services like Microsoft Entra Connect (Azure AD Connect), and VPNs provide network connectivity, not identity trust. Therefore, the completion that aligns with Microsoft SCI documentation is that federation establishes a trust relationship between organizations.

In Microsoft’s cloud responsibility model, Software as a Service (SaaS) is the offering where the cloud provider operates the full application stack and the customer’s responsibility is limited to data and access. Microsoft’s guidance explains that with SaaS, the provider manages the application, runtime, middleware, operating system, virtualization, servers, storage, and networking, while customers focus on “information and identities” and how users access the app. This aligns with your requirement to “manage only the data, user accounts, and user devices” for a cloud-based app. In contrast, PaaS still leaves you responsible for the application and data, and IaaS shifts even more components (OS, middleware, and apps) to you. Microsoft’s shared responsibility descriptions consistently note that SaaS is chosen when organizations want to reduce operational overhead and concentrate on securing and governing their data and identities, leveraging provider controls for platform and infrastructure. Therefore, to meet the scenario of managing only data, user accounts, and devices while the provider runs the rest, SaaS is the correct cloud model.

Microsoft Purview Data Loss Prevention (DLP) defines supported service locations for policy enforcement. The Microsoft Learn/SCI materials state that DLP policies “help protect sensitive information across Microsoft 365 services” and can be scoped to common workloads. In the DLP overview, Microsoft explicitly lists the core cloud locations: “You can create DLP policies that protect content in Exchange Online, SharePoint Online, and OneDrive for Business.” The Teams workload is also included: “DLP can monitor and take protective actions on Microsoft Teams chat and channel messages.” These statements confirm that applying a DLP policy to Exchange Online email (A), OneDrive accounts (B), and Teams chat and channel messages (D) is supported.

By contrast, Exchange Online public folders (C) are not listed among supported DLP locations in the SCI documentation, and Viva Engage (formerly Yammer) (E) is not a standard Microsoft Purview DLP location in the core list above (Viva Engage has separate governance and communication compliance controls). Therefore, from the supported locations enumerated in Microsoft’s DLP guidance, the correct answers are Exchange Online email, OneDrive accounts, and Teams chat and channel messages.

Microsoft Entra ID Identity Protection is a risk-based conditional access capability that “automates the detection and remediation of identity-based risks” and enables admins to investigate risky users and sign-ins. SCI guidance explains that Identity Protection evaluates signals such as user risk and sign-in risk, raises risk detections, and can automatically remediate by enforcing actions like password reset or blocking access via risk-based policies. The portal provides rich investigation experiences for risky users, risky sign-ins, and risk detections, allowing security teams to review evidence and confirm/dismiss risks. In addition, identity risk data can be exported through Azure Monitor/diagnostic settings and integrated with SIEM/SOAR tools, enabling “export of risk detections and security alerts to third-party solutions” for correlation and response. Tasks such as configuring external access for partner organizations are handled by B2B collaboration features, and creating/assigning sensitivity labels belongs to Microsoft Purview Information Protection—not Identity Protection. Therefore, the tasks Identity Protection supports are: export risk detection (B), automate detection and remediation of identity-based risks (C), and investigate risks related to user authentication (D).

Microsoft defines defense in depth as a security strategy that uses multiple, reinforcing layers of protection to reduce the chance that a single failure leads to compromise. In Microsoft’s security guidance, defense in depth is described as employing “a series of mechanisms across multiple layers” to protect identities, endpoints, applications, data, and the network. The model spans layers such as identity, perimeter, network, compute, application, and data, with controls at each layer designed to detect, prevent, and contain attacks. Typical Azure/Microsoft 365 implementations include identity protections (MFA, Conditional Access), network controls (Azure Firewall, NSGs), perimeter filtering (WAF, DDoS Protection), endpoint safeguards (Defender for Endpoint), application security (code and runtime controls), and data protection (encryption, DLP, Purview Information Protection). By “placing multiple layers of defense throughout a network infrastructure,” an organization limits blast radius and increases resilience if one layer is bypassed. This contrasts with threat modeling (a design-time analysis technique), identity as the security perimeter (a principle of Zero Trust), and the shared responsibility model (a cloud governance concept). The scenario in the question precisely matches Microsoft’s defense in depth methodology.

Microsoft’s hybrid identity guidance explains that Microsoft Entra Connect (formerly Azure AD Connect) is the tool used to synchronize identities from on-premises AD DS to a Microsoft Entra tenant, enabling hybrid identity. Microsoft states that hybrid identity is achieved by connecting your on-premises directory with your cloud directory so users have a single identity to access both environments. This does not require two Microsoft 365 tenants; rather, it requires one Microsoft Entra tenant integrated with your on-premises AD DS. For authentication models—Password Hash Synchronization (PHS), Pass-through Authentication (PTA), or federation (AD FS)—Microsoft specifies that directory synchronization is required so that user objects exist in Entra ID and can authenticate to cloud services while maintaining a consistent identity. Thus, Entra Connect is used to implement the synchronization underpinning hybrid identity; two M365 tenants are unnecessary; and synchronization between AD DS and Entra ID is required for authenticating hybrid identities across Microsoft cloud services.

Explanation

Azure Active Directory (Azure AD) access reviews enable organizations to efficiently manage group memberships, access to enterprise applications, and role assignments.

According to Microsoft’s Security, Compliance, and Identity (SCI) documentation and learning paths (specifically SC-900, SC-300, and Azure AD Identity Protection modules):

“Conditional Access policies in Azure AD are the primary method for enforcing access controls based on specific conditions such as user, group, location, device compliance, and application.”

In this case, the organization can configure a Conditional Access policy that targets a specific Azure AD group and requires MFA as a condition before access is granted. The typical policy setup includes:

Assignments: Target users or groups (e.g., “Finance Department Users”).

Cloud apps or actions: Specify which applications or services are protected (e.g., Microsoft 365).

Access controls: Set the control to “Require multi-factor authentication.”

Microsoft’s SCI training materials further state:

“Conditional Access enables administrators to enforce MFA for specific users, groups, or scenarios. It provides flexibility to protect access without enabling MFA globally for all users.”

Other options explained:

Azure Policy (A) applies to Azure resources, not user authentication.

Communication compliance policy (B) monitors message content for compliance violations.

User risk policy (D) is part of Azure AD Identity Protection, enforcing MFA based on detected user risk levels, not group membership.

Therefore, the verified and correct answer is: ✅ C. a Conditional Access policy.

Microsoft’s identity platform (Microsoft Entra ID, formerly Azure AD) supports built-in and custom directory roles. The official guidance states that you can “create your own custom roles to grant permissions for management of Microsoft Entra resources,” and those roles consist of specific role permissions that you select to tailor least-privilege administration. The documentation also lists Global administrator (formerly Company Administrator) as a built-in role that “has access to all administrative features” and can delegate role assignments, reset passwords for all users, and manage identity settings across the tenant. Regarding assignments, Microsoft is explicit that role assignment is many-to-many: administrators can “assign one or more roles to a user,” and the user’s effective permissions are the union of the privileges from all assigned roles. Consequently, (1) creating custom roles is supported (Yes), (2) Global administrator is indeed a defined Azure AD/Microsoft Entra role (Yes), and (3) a user being limited to only one role is incorrect (No) because multiple role assignments to the same user are permitted and commonly used to implement least privilege and separation of duties.

Box 1: Yes

Azure AD supports custom roles.

Box 2: Yes

Global Administrator has access to all administrative features in Azure Active Directory. Box 3: No

access and application control

In Microsoft Defender for Cloud, the capabilities grouped as access and application control are designed to harden Azure virtual machines by limiting both what can access a VM and what can run on it. Microsoft’s documentation explains that Adaptive application controls “help you control which applications can run on your VMs by allowing only known-safe applications,” which directly helps block malware and other unwanted applications. In the same family, Just-in-time (JIT) VM access “reduces exposure to attacks by locking down inbound traffic to your VMs and opening only the required ports, for approved users, for a limited time,” thereby reducing the network attack surface. These capabilities are surfaced in Defender for Cloud recommendations and policies to enforce least privilege at the network edge and on the endpoint execution layer.

By contrast, Cloud Security Posture Management (CSPM) provides continuous assessment and secure-score-driven recommendations but isn’t the control that actively blocks applications or time-bounds inbound access. Container security targets container images and runtimes, and vulnerability assessment identifies software vulnerabilities but doesn’t enforce allow-listing or time-bound access. Therefore, the correct completion is access and application control, which encompasses Adaptive application controls and JIT VM access to protect VMs from unwanted apps and minimize exposed network surface.

Microsoft Purview Data Loss Prevention (DLP) is designed to prevent the inadvertent or inappropriate sharing of sensitive data across Microsoft 365 services. Microsoft’s guidance states that DLP “helps you discover, monitor, and protect sensitive items across Microsoft 365,” and that with DLP policies you can “identify, monitor, and automatically protect sensitive items in Exchange Online, SharePoint Online, OneDrive for Business, and Microsoft Teams.” This directly supports option C, because DLP can detect sensitive info in OneDrive documents and automatically apply protective actions such as blocking external sharing, restricting access, or auditing the event.

DLP also provides end-user coaching through policy tips: “Policy tips are informative notices that appear when users are working with content that contains sensitive info … to help prevent data loss.” When a user is about to send or share sensitive data in violation of policy, these tips surface in Outlook and Office apps (including when files are stored in SharePoint/OneDrive), aligning with option A.

By contrast, enabling disk encryption (e.g., BitLocker) and applying device security baselines are endpoint/device management tasks handled through Microsoft Intune or Group Policy—not by DLP. Therefore, A and C are the correct tasks you can implement with Microsoft 365 DLP policies.

Onboarding Microsoft Sentinel starts by enabling Sentinel on an existing Log Analytics workspace and then connecting data sources so analytics can operate on ingested security data. Microsoft’s Sentinel onboarding guidance emphasizes that after you add Sentinel to a workspace, you must “connect Microsoft services, non-Microsoft solutions, and custom sources” using built-in data connectors. Microsoft also states that “you need data in your workspace before you can use Microsoft Sentinel’s analytics, hunting, and investigation capabilities.” Features such as custom analytics rules, hunting queries, and incident correlation depend on ingested telemetry from sources like Microsoft Entra ID sign-in logs, Microsoft 365, Defender products, firewalls, and other appliances. Because the question already gives you a Log Analytics workspace (the prerequisite for enabling Sentinel), the first action in the onboarding workflow that unlocks Sentinel’s value is to connect your security sources. Only after data is flowing should you proceed to create analytics rules, hunting queries, and incident processes. Therefore, the correct first step to onboard Microsoft Sentinel is connect to your security sources.

Microsoft Entra self-service password reset (SSPR) supports multiple verification methods that users can register and use to prove their identity during a reset. Microsoft’s documentation lists the SSPR methods as: “Mobile app notification,” “Mobile app code,” “Email,” “Mobile phone (text message or call),” “Office phone,” and “Security questions.” Administrators choose which of these are allowed and how many methods are required. During the reset flow, SSPR “prompts the user to verify with the registered methods” before permitting a password change. Notably, certificates and picture passwords are not SSPR verification methods in Microsoft Entra ID. Therefore, among the options provided: a text message to a phone (mobile phone), a mobile app notification (Microsoft Authenticator), and security questions are valid SSPR authentication methods; certificate and picture password are not supported for SSPR. This aligns with SCI learning content that positions SSPR as a user-empowering capability to securely restore access using admin-approved methods without help-desk intervention.

Microsoft’s Zero Trust guidance defines three core principles: “Verify explicitly, use least-privileged access, and assume breach.” In Microsoft’s SCI learning content and Zero Trust overview, the model is described as one that “treats every access attempt as though it originates from an open, untrusted network” and therefore requires explicit verification using all available signals (identity, device health, location, data sensitivity, and anomalies). This directly confirms the first statement as true: Verify explicitly is a guiding principle.

The same guidance states organizations must “assume breach”—designing controls so that if an attacker is already inside, blast radius is minimized through segmentation, Just-In-Time/Just-Enough-Access, continuous monitoring, and rapid detection and response. Microsoft’s Zero Trust materials repeatedly explain to “assume attackers are present” and to “contain and remediate” through defense-in-depth controls, which validates the second statement as true.

Finally, Zero Trust rejects perimeter-based implicit trust. Microsoft clarifies that the model does not rely on a trusted internal network protected by a firewall; instead it “never trusts, always verifies,” continuously enforcing policy regardless of network location (on-premises or internet). Therefore, the statement that Zero Trust assumes a firewall secures the internal network from external threats is false because Zero Trust presumes no inherent safety from being “inside” the network and requires continuous verification and least-privileged access everywhere.

In Microsoft identity terminology, authentication is the step that proves who the user is when they attempt to sign in. Microsoft Learn defines it plainly: “Authentication is the process of proving the identity of a user, device, or service.” By contrast, “Authorization is the process of determining what a user, device, or service can do.” During sign-in to Microsoft Entra ID (formerly Azure AD), “the identity provider validates credentials and, upon successful authentication, issues tokens that applications use to grant access.” Microsoft further explains the available methods: “Microsoft Entra ID supports multiple authentication methods, including passwords, multi-factor authentication, FIDO2 security keys, certificate-based authentication, and federated authentication.”

Auditing and administration are not the mechanisms that verify identity at sign-in. Auditing “records security-relevant events for investigation and compliance,” while administration “refers to configuring and managing identities, access policies, and settings.” Therefore, in the sentence “When users sign in, _____ verifies their credentials to prove their identity,” the correct completion is authentication, because it is the control that validates the user’s credentials and establishes identity before any authorization decisions are made.

Microsoft documents for Defender for Endpoint (MDE) describe it as an enterprise endpoint security platform that supports Windows 10/11, Windows Server, Linux, macOS, and mobile platforms (Android and iOS/iPadOS). The platform provides threat and vulnerability management, attack surface reduction, next-generation protection, endpoint detection and response, and automated investigation and remediation across those supported operating systems. Because MDE supports Windows client operating systems and servers, it can also be used on Azure virtual machines that run supported Windows versions; onboarding methods include local scripts, Microsoft Endpoint Manager, or cloud integrations, allowing VM endpoints to receive the same protection and EDR capabilities as physical devices.

By contrast, malware scanning in SharePoint Online, OneDrive, and Microsoft Teams is provided by Microsoft Defender for Office 365 (Safe Attachments for SharePoint, OneDrive, and Teams)—a different service within the Microsoft 365 Defender family. This service analyzes files as they are uploaded or shared to detect and block malicious content in collaboration workloads, which is outside the scope of MDE’s endpoint-focused protections. Therefore: Android protection (Yes), Azure VMs running Windows 10 (Yes), and SharePoint Online anti-virus protection by MDE (No, handled by Defender for Office 365).

In Microsoft’s Security, Compliance, and Identity guidance, the Microsoft Service Trust Portal (STP) is identified as the public destination where Microsoft publishes independent audit reports, compliance certifications, assessment reports, and trust-related documentation for Microsoft cloud services. The documentation explains that the STP provides customers with access to materials such as SOC 1/SOC 2 reports, ISO/IEC certifications, audit summaries, and compliance guides, enabling organizations to evaluate Microsoft’s controls and map them to their own regulatory requirements. The STP is expressly positioned for transparency and due diligence, allowing customers and auditors to review Microsoft’s compliance posture and understand how Microsoft manages security, privacy, and compliance across its cloud platforms.

By contrast, the Microsoft Purview compliance portal is a tenant-admin portal used to configure and manage compliance solutions (e.g., DLP, Information Protection, eDiscovery, Insider Risk, Compliance Manager) within your organization—not a public repository of Microsoft’s audit artifacts. The Microsoft Purview governance portal focuses on data governance and cataloging scenarios. The Azure EA portal is used for Enterprise Agreement billing and usage management. Therefore, the public site for publishing audit reports and other compliance-related information for Microsoft cloud services is the Microsoft Service Trust Portal.

Microsoft guidance describes Azure Blueprints as the native way to stamp out governed environments consistently across tenants and subscriptions. Microsoft states: “Azure Blueprints enables cloud architects and central information technology groups to define a repeatable set of Azure resources that implements and adheres to an organization’s standards, patterns, and requirements.” It further explains that “Blueprints make it possible to package artifacts, such as role assignments, policy assignments, ARM templates, and resource groups, into a single blueprint definition that can be assigned to your subscriptions.” This is precisely what’s required when you need to deploy Azure resources across multiple subscriptions in a consistent manner—you define a blueprint (with policies, RBAC, templates, and resource groups) and assign it to one or more subscriptions to get uniform, compliant deployments. While services like Microsoft Defender for Cloud and Azure Policy help assess and enforce security and compliance, Blueprints orchestrate multi-artifact deployment and governance at scale from day one of an environment’s lifecycle, ensuring standardization and repeatability across subscriptions.

In Microsoft’s Security, Compliance, and Identity materials, Azure AD B2B collaboration is the feature designed for working with external organizations. Microsoft describes it as follows: “Azure AD B2B collaboration allows you to securely share your company’s applications and services with guest users from any other organization, while maintaining control over your own corporate data. Guest users sign in with their own work, school, or social identities, and appear as guest users in your directory.” This directly matches the sentence in the prompt—enabling collaboration with suppliers, partners, and vendors while ensuring that external users appear as guest users in the tenant.

By contrast, Active Directory Domain Services (AD DS) is an on-premises directory service for Windows domain joined resources and does not provide cloud guest user collaboration. Active Directory forest trusts establish trust relationships between AD DS forests for resource access, not modern cloud guest access using Conditional Access, MFA, or entitlement processes. Azure AD B2C is for consumer/retail scenarios where you build customer-facing apps, managing their identities in a separate customer directory; it is not intended for partner collaboration within your enterprise tenant. Therefore, the capability that fits the statement—external partner collaboration with users appearing as guest accounts—is Azure AD B2B.

Microsoft states that Azure Bastion is a fully managed PaaS service that provides “secure and seamless RDP/SSH connectivity to your virtual machines directly in the Azure portal over SSL” and “eliminates the need to expose public IP addresses on your VMs.” With Bastion, users open the VM blade in the Azure portal and launch an in-browser RDP or SSH session; no separate RDP or SSH client is required because the session is proxied through Bastion using HTTPS/TLS. The platform is designed to be agentless and browser-based, providing connectivity without VPN or jump hosts and enforcing least-exposure by keeping management ports off the internet. While traditional tools such as Remote Desktop Connection or an SSH client are common for direct access, Bastion’s prescribed access method in Microsoft guidance is to initiate the session from the Azure portal. PowerShell remoting is unrelated to Bastion’s web-based brokering. Therefore, to connect to an Azure virtual machine by using Azure Bastion, you use the Azure portal.

In Microsoft cloud identity, access to Azure resources follows the classical order of authenticate, then authorize. Microsoft Learn defines the two steps clearly: “Authentication is the process of establishing the identity of a person or service,” while “Authorization is the process of determining what a person or service can do.” In an Azure sign-in, Microsoft Entra ID (formerly Azure AD) first validates the user’s credentials (password, MFA, Conditional Access, device compliance, risk evaluation). Upon success, a security token is issued that proves the user’s identity. Only after this identity is established does Azure proceed to authorization, where the Azure Resource Manager evaluates role-based access control (RBAC) assignments to decide what actions are allowed. SCI guidance emphasizes this sequence for Zero Trust: “Verify explicitly” (authenticate with strong signals) and then “use least privilege access” (authorize by RBAC or Privileged Identity Management). Therefore, when users sign in to the Azure portal, the first step is authentication—verifying who they are. The subsequent step is authorization, which determines what resources and operations they can access based on roles, scope, and policy. This ordering underpins secure identity and access management across Microsoft 365 and Azure.

In the Microsoft Cloud Adoption Framework (CAF) for Azure, the methodology is organized into sequential stages that guide an organization from initial intent through operations. Microsoft describes the flow as: “Strategy → Plan → Ready → Adopt → Govern → Manage.” The guidance explains that before building landing zones or preparing environments (Ready), organizations should complete the Strategy and Plan work. Microsoft states that the framework “helps you create and align your business strategy, define business outcomes, and justify cloud adoption” in the Strategy stage; then, in Plan, you “translate that strategy into an actionable adoption plan, rationalize portfolios, and prepare a cloud adoption backlog.” Only after these two stages does the Ready phase occur, where you “prepare your cloud environment (landing zone) to host the workloads.”

Additionally, CAF emphasizes that Govern and Manage are ongoing disciplines that operate alongside and after adoption rather than preceding Ready: “Govern and Manage provide iterative guardrails and operational baselines that evolve as you adopt more workloads.” Therefore, the two phases addressed before the Ready phase are Define Strategy and Plan, aligning with Microsoft’s prescribed order and intent of the Cloud Adoption Framework methodology.

Microsoft’s identity guidance classifies social identity services (e.g., GitHub, Google, Facebook) as cloud-based identity providers that can be used for external identities with Microsoft Entra ID. In this model, GitHub functions as an IdP using OAuth/OpenID Connect to authenticate users and issue tokens that applications or Entra ID can accept. Federation in Microsoft terms is the trust relationship that allows SSO across organizational boundaries and with multiple identity providers, such as Active Directory Federation Services (AD FS), SAML, or OpenID Connect providers, so users can authenticate once and access multiple apps without repeated sign-ins.

Crucially, SCI materials distinguish roles: an identity provider primarily handles authentication (proving who the user is and issuing claims/tokens). Authorization—deciding what the user can do—is enforced by the application or resource (often using roles/claims from the IdP). Auditing spans multiple planes: the IdP provides sign-in and audit logs, while applications and other services maintain their own activity logs. Therefore, it is incorrect to say a central IdP “manages all modern authentication services” including authorization and auditing; those responsibilities are shared across the identity platform and the relying applications/resources.

Microsoft defines Information Barriers (IB) as policies that “restrict communication and collaboration between specific users or groups” to meet regulatory or conflict-of-interest requirements. In Microsoft 365, IB enforcement is provided across collaboration workloads—most notably Microsoft Teams and, with IB v2, SharePoint and OneDrive—so that users placed in segments that shouldn’t interact are prevented from chatting, meeting, or sharing files with one another. The service “controls who can communicate and collaborate with whom” and applies those controls to Teams chats/channels and SharePoint/OneDrive sites and files so that segment boundaries are honored when users attempt to share or access content.

By contrast, Exchange Online email is not a supported enforcement surface for Information Barriers; IB does not block or route mail. Email restrictions are handled with other capabilities (for example, mail flow rules), not IB. Therefore, in alignment with Microsoft’s SCI guidance: IB does work with Microsoft Teams and with Microsoft SharePoint/OneDrive, but it does not provide policy enforcement for Exchange email.

The Microsoft Service Trust Portal contains details about Microsoft's implementation of controls and processes that protect our cloud services and the customer data therein.

https://docs.microsoft.com/en-us/azure/active-directory/privileged-identity-management/pim-configure

Privileged Identity Management provides time-based and approval-based role activation to mitigate the risks of excessive, unnecessary, or misused access permissions on resources that you care about. Here are some of the key features of Privileged Identity Management: Provide just-in-time privileged access to Azure AD and Azure resources Assign time-bound access to resources using start and end dates Require approval to activate privileged roles Enforce multi-factor authentication to activate any role Use justification to understand why users activate Get notifications when privileged roles are activated Conduct access reviews to ensure users still need roles Download audit history for internal or external audit Prevents removal of the last active Global Administrator role assignment

In Microsoft Entra ID (formerly Azure AD), Managed Identities for Azure resources are the built-in way for an Azure resource to authenticate to other Azure services without storing credentials. Microsoft’s documentation states: “Managed identities for Azure resources provide Azure services with an automatically managed identity in Azure Active Directory.” It further distinguishes the two types and clarifies the one used here: “A system-assigned managed identity is enabled directly on an Azure service instance. When enabled, Azure creates an identity for the instance in Azure AD.” Microsoft also emphasizes the lifecycle binding: “This identity is tied to the lifecycle of that service instance and is deleted when the resource is deleted.” Once enabled, the resource can call Azure services by requesting tokens: “You can use this identity to obtain Azure AD tokens for authentication to services that support Azure AD authentication.”

Because the prompt explicitly says “system-assigned”, the correct completion is managed identity. The other options do not match Microsoft’s definition: a user identity refers to a human user; a service principal is the underlying object applications use but isn’t what Azure terms “system-assigned”; and an Azure AD–joined device pertains to device registration, not resource-to-service authentication. Therefore, the sentence correctly reads: “An Azure resource can use a system-assigned managed identity to access Azure services.”

Security defaults make it easy to protect your organization with the following preconfigured security settings:

Requiring all users to register for Azure AD Multi-Factor Authentication.

Requiring administrators to do multi-factor authentication.

Blocking legacy authentication protocols.

Requiring users to do multi-factor authentication when necessary.

Protecting privileged activities like access to the Azure portal.

In Microsoft Purview Compliance Manager, the built-in Compliance score and assessments are designed for ongoing, risk-based monitoring of your organization’s compliance posture. Microsoft’s SCI materials describe Compliance Manager as a solution that “helps you track, improve, and demonstrate your compliance posture” by mapping regulations and standards to improvement actions and assessments. The experience is not a one-time or periodic snapshot; it is intended to be continuous. As you implement controls, provide evidence, or when automated tests record results, “your score is updated as you complete actions,” reflecting current progress toward data protection and regulatory requirements.

Assessments in Compliance Manager persist over time and are maintained through continuous evaluation: actions can be automatically tested when supported (for example, configuration-based controls in Microsoft 365) or manually assessed on an ongoing basis by compliance teams. This design enables organizations to prioritize and remediate issues as they arise, rather than waiting for monthly or quarterly reviews. Because of this continuous scoring and reassessment model, Compliance Manager assesses compliance data continually for an organization, providing near real-time insight into control effectiveness and residual risk across standards such as GDPR, ISO 27001, and NIST frameworks.

In Microsoft 365, the unified audit log retention depends on the audit tier included with the subscription. Current SCI/Compliance documentation states that Audit (Standard)—which is available with Microsoft 365 E3—retains audit records for 180 days. The docs describe that organizations with E3 receive “up to 180 days of audit log retention” for user and admin activities captured in the unified audit pipeline. Longer retention (for example 365 days and beyond with customizable policies) is part of Audit (Premium) features generally associated with E5/E5 Compliance. Because the scenario specifies a Microsoft 365 E3 subscription using the unified audit log and Basic/Standard Audit, the retention period for audit records is 180 days.

Microsoft explains that Conditional Access (CA) evaluates signals and then enforces access decisions using grant and session controls: “Conditional Access policies are enforced after first-factor authentication is completed” and are used to “make access control decisions.” CA policies target users and groups—including administrators—unless explicitly excluded. Microsoft guidance recommends excluding only break-glass accounts: “Customers with Azure AD roles such as Global administrator should have at least one emergency access account excluded from policies.” This means admins are not exempt by default; they are in scope unless you configure exclusions.

CA does not manage directory role assignments; that is handled by role assignment and Privileged Identity Management (PIM). CA’s grant controls focus on access conditions: “Grant access… Require multi-factor authentication” and Microsoft lists a common baseline: “Require multi-factor authentication for all users.” Therefore, CA can require MFA to access cloud apps, but it cannot add users to Azure AD roles.

These statements from Microsoft’s SCI materials confirm the outcomes: Admins are not inherently exempt (No), CA cannot assign roles (No), and CA can force MFA for app access (Yes).