Imagine leaving your house unlocked with all your valuables inside. That’s what skipping a Microsoft 365 security audit feels like.
As organizations rely more on cloud tools for collaboration, productivity, and data management, their attack surface expands dramatically. A regular security audit ensures your Microsoft 365 environment is locked down, compliant, and resilient.
This guide covers everything you need — from what to audit and how to prepare, to the tools, scripts, and best practices that help secure your tenant.
What is a Microsoft 365 Security Audit?
A Microsoft 365 security audit is a comprehensive review of your organization’s environment designed to uncover:
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Security gaps and misconfigurations
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Compliance and data protection issues
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Risky user or admin behaviors
Scope of the Audit Includes:
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User and admin access
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Data sharing and permissions
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Email and Exchange protection
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Device and endpoint security
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Monitoring and logging configuration
This isn’t just about compliance — it’s your first line of defense against internal and external threats.
Benefits of Regular Security Assessments
Why should you perform regular Microsoft 365 security audits?
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🔒 Proactive Risk Reduction – Identify and fix weak points before attackers find them.
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📊 Compliance Readiness – Stay audit-ready for ISO 27001, HIPAA, and GDPR.
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🔁 Operational Continuity – Avoid downtime caused by security incidents.
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💡 Security Awareness – Detect shadow admin accounts or unused privileges.
When Should You Perform a Microsoft 365 Security Audit?
While continuous monitoring is ideal, schedule deeper audits:
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Quarterly – For high-security or regulated industries
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After major changes – Vendor onboarding or migrations
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Post-incident – Following a breach or unusual activity
Pre-Audit Preparation
Before you start your Microsoft 365 audit, gather:
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A cross-functional team (IT, Security, Compliance)
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List of critical apps and data repositories
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Access to portals: Microsoft 365 Admin Center, Entra ID, Purview, and Security
Pro Tip: Assign the Global Reader role to auditors for secure, read-only access.
Key Areas to Audit in Microsoft 365
1. Identity and Access Management
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Enforce Multi-Factor Authentication (MFA) for all users and admins.
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Configure Conditional Access policies to reduce risky sign-ins.
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Review and clean up guest accounts.
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Maintain break-glass accounts with monitoring alerts.
🔗 Read the complete guide on Microsoft Entra ID Protection.
2. Licensing and Role-Based Access
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Verify licenses are assigned only to active users.
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Limit privileged roles like Global Admin and Exchange Admin.
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Remove inactive users from admin roles.
Tip: Run PowerShell reports to analyze license usage and access roles. Review the License with the PowerShell script
3. Exchange Online & Email Security
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Enable Anti-phishing, Anti-spam, and Anti-malware policies.
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Configure DMARC, DKIM, and SPF for email authentication.
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Enable mail flow auditing for compliance tracking.
4. SharePoint & OneDrive Sharing Settings
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Restrict external sharing to trusted domains.
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Apply sensitivity labels to confidential content.
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Review for anonymous links that expose data publicly.
5. Microsoft Teams & Collaboration Controls
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Audit guest and external access policies.
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Align chat and file sharing settings with compliance rules.
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Train users on secure collaboration practices.
6. Microsoft Defender for Office 365
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Enable Safe Links for URL scanning.
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Turn on Safe Attachments for malware detection.
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Configure automated threat notifications.
🔗 Check out our guide on Microsoft Defender for Office 365.
7. Data Loss Prevention & Information Protection
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Apply DLP policies to monitor sensitive data (financial, health).
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Map sensitive information types to policies.
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Train users on sensitivity labels and data classification.
🔗 Learn how to set up DLP policies.
8. Audit Logs and Activity Reports
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Ensure Unified Audit Log is enabled (minimum 180 days).
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Configure activity alerts for mass deletions or permission changes.
9. Microsoft Entra ID Protection
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Configure user risk and sign-in risk policies.
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Block or force password reset for high-risk users.
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Enable automated remediation for compromised accounts.
🔗 Complete guide on Microsoft Entra ID Overview
10. Endpoint Security & Intune Compliance
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Ensure all corporate devices are enrolled in Intune.
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Apply mobile application policies for Teams, Outlook, and OneDrive.
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Enforce compliance using Conditional Access.
🔗 Explore our full guide on Microsoft Intune Compliance.
Top Tools for Microsoft 365 Security Auditing
Microsoft Secure Score
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Get a security score (0–100) with improvement insights
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Track progress and historical trends
🔗 Read the complete guide on Microsoft Secure Score
Third-Party Tools
- SysKit, AvePoint, Admin Droid, Cloud Capsule, for deeper reporting and alerting
- Automated policy monitoring and license usage analysis
📑 Creating a Security Audit Checklist
A working checklist helps you standardize the audit. Here’s a quick example:
| Area | Item to Check | Status |
| MFA | Enabled for all users | ✅ |
| DLP | Policy for Credit Card numbers | ❌ |
| Admin Roles | Global Admin count | 5 (should be < 3) |
| Audit Logs | Enabled | ✅ |
Post-Audit Action Plan
Once the audit is complete:
- ✅ Prioritize findings by risk
- 🧑💻 Assign ownership and remediation timelines
- 🔁 Review Secure Score monthly
- 🧾 Set a quarterly audit review calendar
Conclusion
A Microsoft 365 security audit isn’t a compliance checkbox — it’s your roadmap to a secure and resilient cloud environment.
By auditing regularly, empowering admins, and following a structured approach, you protect your organization from data leaks, account takeovers, and compliance pitfalls.
Don’t wait for an incident — start your next Microsoft 365 security audit today.
FAQs
1. How often should I audit my Microsoft 365 tenant?
At minimum, quarterly. More frequently for high-risk industries or post-breach scenarios.
2. Is Secure Score enough for a full audit?
No. It’s a great starting point but doesn’t cover all compliance or configuration nuances.
3. Can I automate M365 audits?
Yes, with tools like Microsoft Graph API, PowerShell scripts, and third-party platforms like SysKit or AvePoint.
4. Do I need third-party tools for a successful audit?
Not necessarily. Microsoft’s built-in tools are robust, but third-party tools add depth, reporting, and automation.
5. What’s the difference between a security audit and a compliance audit?
Security audits focus on risk and technical misconfigurations, while compliance audits align practices to standards like GDPR, HIPAA, or ISO.
