Imagine leaving your house unlocked with all your valuables inside. That’s what skipping a security audit feels like in Microsoft 365. As organizations increasingly rely on cloud-based tools for productivity, collaboration, and communication, the risk surface expands—dramatically. That’s where a Microsoft 365 Security Audit and Assessment comes into play.
This guide walks you through everything you need to know: from what to audit and how to prepare, to the tools and best practices you need to lock things down.
🧠 What is a Microsoft 365 Security Audit?
A Microsoft 365 Security Audit is a comprehensive review of your organization’s M365 environment to identify security gaps, misconfigurations, compliance risks, and user behavior anomalies.
Scope of the Audit Includes:
- User and admin access
- Data sharing and permissions
- Email hygiene and protection
- Device and endpoint security
- Monitoring and logging setup
It’s not just a checkbox for compliance—it’s a strategic activity that helps you defend your digital perimeter.
✅ Benefits of Regular Security Assessments
Why bother with frequent assessments?
🔒 Proactive Risk Reduction – Fix weak spots before attackers exploit them
📊 Compliance Readiness – Prepare for audits tied to standards like ISO 27001, HIPAA, GDPR
🔁 Operational Continuity – Avoid breaches and downtime
💡 Security Awareness – Highlight misused permissions or shadow admin accounts
📅 When Should You Perform a Security Audit?
While you should always monitor continuously, deeper audits are recommended:
Quarterly – For high-security environments
After major changes – Like onboarding new vendors or migrating mailboxes
Post-incident – If you’ve had a breach, you must re-assess
🔧 Pre-Audit Preparation
You can’t fix what you can’t see. Start by gathering:
A cross-functional team (IT, Security, Compliance)
A list of business-critical apps and data
Access to the Microsoft 365 Admin Center, Entra ID, Purview, and Security portals
🛠 Pro tip: Use Global Reader role for safe read-only access during auditing.
🔍 Key Areas to Audit in Microsoft 365
1. Identity and Access Management
- Is Multi-Factor Authentication (MFA) enforced for all users and admins?
- Are Conditional Access policies configured to limit risky sign-ins?
- Are guest accounts reviewed regularly?
- Do you have break-glass accounts excluded from policies (with alerts)?
- Complete guide about Identity Protection.
2. Licensing and Role-Based Access
- Are licenses assigned only to active users?
- Are admin roles like Global Admin, Exchange Admin, or SharePoint Admin limited?
- Are there any inactive users still holding privileged roles?
- Review the License with the PowerShell script
3. Exchange Online & Email Security
- Are Anti-phishing, Anti-spam, and Anti-malware policies enabled?
- Are DMARC, DKIM, and SPF properly configured for email authentication?
- Is mail flow auditing enabled for compliance?
4. SharePoint & OneDrive Sharing Settings
- Is external sharing tightly controlled?
- Are sensitivity labels applied to confidential documents?
- Are there any anonymous links shared that shouldn’t exist?
5. Microsoft Teams & Collaboration Controls
- Are guest access and anonymous join policies reviewed?
- Are chat and file sharing policies consistent with company policies?
- Are users trained on what to share where?
6. Microsoft Defender for Office 365
- Is Safe Links enabled to scan URLs in real-time?
- Are Safe Attachments scanning enabled for malware?
- Are threat policies set up for notifications and auto-remediation?
- Review the guide on Microsoft Defender for office 365.
7. Data Loss Prevention & Information Protection
- Are DLP policies in place to monitor financial or health data?
- Are sensitive information types mapped to policies?
- Is user training done around sensitivity labels and data classification?
- Understand how DLP and Setup the DLP policies.
8. Audit Logs and Activity Reports
- Is the Unified Audit Log enabled and retained for at least 90 days?
- Are activity alerts configured for suspicious behavior (e.g., mass deletions, permission changes)?
9. Microsoft Entra ID Protection
- Are user risk and sign-in risk policies configured?
- Are high-risk users forced to reset passwords or blocked entirely?
- Is automated remediation enabled?
- Complete guide on Microsoft Entra ID Overview
10. Endpoint Security & Intune Compliance
- Are all corporate devices enrolled and compliant in Intune?
- Are mobile application policies configured for Teams, Outlook, OneDrive?
- Are compliance rules enforced by Conditional Access?
- Checkout the guide on Intune – Microsoft Intune
🧰 Top Tools for Microsoft 365 Security Auditing
📈 Microsoft Secure Score
Get a percentage-based score out of 100
Review improvement actions with implementation guidance
Track historical trends
Check out the complete guide on Microsoft 365 Security 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 well-performed Microsoft 365 Security Audit isn’t just about checking boxes—it’s your roadmap to a secure, compliant, and resilient digital workplace. With threats becoming more sophisticated, proactive auditing empowers you to stay ahead, protect your users, and safeguard your data.
Don’t wait for an incident. Schedule that audit, empower your admins, and secure your environment—one setting at a time.
❓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.
