AZ-104 Manage Azure Identities and Governance Practice Question
A department has 10 subscriptions and wants the same two governance rules applied to all current and future subscriptions. One rule audits missing tags, and the other denies unapproved locations. Which two actions should the administrator take? Select two.
⚠ Common exam trap
Candidates often confuse Azure Policy with Azure RBAC or resource locks, thinking they can enforce governance rules through permissions or protection mechanisms, when Policy is the only service that audits and denies resource configurations based on rules.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Create an Azure Policy initiative that contains both policy definitions.
Azure Policy Initiative allows grouping multiple policy definitions (like audit for missing tags and deny for unapproved locations) into a single set for coordinated enforcement. Assigning the initiative at the management group scope ensures it applies to all current and future subscriptions under that management group, meeting the requirement for consistent governance across all 10 subscriptions and any new ones added later.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Create an Azure Policy initiative that contains both policy definitions.
Why this is correct
An Azure Policy initiative (policySetDefinition) bundles multiple individual policy definitions into a single assignable unit, allowing the department to enforce both tag-auditing and allowed-location rules together. This reduces assignment overhead because one initiative assignment generates a combined compliance state for all 10 subscriptions. It also makes future policy updates easier because you only need to edit the initiative definition rather than modifying separate assignments.
- ✓
Assign the initiative at the management group scope.
Why this is correct
Assigning the initiative at the management group scope leverages Azure Policy's inheritance model, automatically applying the same two policy definitions to every subscription under that management group. Existing and future subscriptions inherit the assignment, so new subscriptions are compliant from onboarding without per-subscription configuration. Administrators can still exclude specific child scopes using the Exclusions feature while keeping central governance intact.
- ✗
Assign each policy only to one resource group.
Why it's wrong here
Scoping the assignments to a single resource group would leave the other nine subscriptions (and all other resource groups) entirely ungoverned, creating severe compliance gaps. It also fragments governance: you would need many separate assignments for each resource group, and any new resource groups in those subscriptions would automatically lack the policy. A broader scope is necessary to meet the department's requirement of uniform governance across all 10 subscriptions.
When this WOULD be correct
This option would be correct if the question asked to apply different policies to specific resource groups within a single subscription, and the requirement was to target only those resource groups, not all subscriptions.
- ✗
Use Azure RBAC instead of Policy for both requirements.
Why it's wrong here
Azure RBAC governs who can perform actions by defining roles and permissions, while Azure Policy governs what resource configurations are allowed or expected. Role assignments cannot enforce that resources are created only in a specific region or that every resource has a required tag—those are policy evaluation criteria outside RBAC's authorization model. Even with RBAC, a user with Contributor permissions could create a resource in any location unless a policy denies it.
When this WOULD be correct
A question asks: 'You need to ensure that only users in the IT department can create virtual machines in a subscription. Which solution should you use?' In that scenario, Azure RBAC (e.g., a custom role) would be correct because it controls permissions to create resources.
- ✗
Create a read-only lock on each subscription.
Why it's wrong here
A read-only lock invokes a deny on all write and delete operations at the resource scope, but it is an operational safeguard, not a compliance control. It does not evaluate tags, cannot inspect resource properties for permitted regions, and does not produce policy compliance data. Locks are also applied uniformly and cannot conditionally allow or deny regions; they simply prevent modifications to locked resources.
When this WOULD be correct
A question asks: 'You need to prevent accidental deletion of critical resources in a subscription. What should you do?' In that scenario, applying a read-only lock on the subscription would be correct.
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The AZ-104 exam frequently reuses these exact scenarios with slightly different constraints.
✓Create an Azure Policy initiative that contains both policy definitions.Correct answer▾
Why this is correct
An Azure Policy initiative (policySetDefinition) bundles multiple individual policy definitions into a single assignable unit, allowing the department to enforce both tag-auditing and allowed-location rules together. This reduces assignment overhead because one initiative assignment generates a combined compliance state for all 10 subscriptions. It also makes future policy updates easier because you only need to edit the initiative definition rather than modifying separate assignments.
✗Assign each policy only to one resource group.Wrong answer — click to see why▾
Why this is wrong here
Assigning each policy only to one resource group would not apply the governance rules to all 10 subscriptions or future subscriptions, as required. The question specifies that the rules must apply to all current and future subscriptions, which requires assignment at a management group scope.
★ When this WOULD be the correct answer
This option would be correct if the question asked to apply different policies to specific resource groups within a single subscription, and the requirement was to target only those resource groups, not all subscriptions.
Why candidates choose this
Candidates may think that assigning policies to resource groups is sufficient for governance, but they overlook the need for broad, consistent application across multiple subscriptions and future resources.
✗Use Azure RBAC instead of Policy for both requirements.Wrong answer — click to see why▾
Why this is wrong here
Azure RBAC controls who can access resources (authorization), not what configurations or locations are allowed. The requirements are about auditing tags and denying unapproved locations, which are governance rules enforced by Azure Policy, not RBAC.
★ When this WOULD be the correct answer
A question asks: 'You need to ensure that only users in the IT department can create virtual machines in a subscription. Which solution should you use?' In that scenario, Azure RBAC (e.g., a custom role) would be correct because it controls permissions to create resources.
Why candidates choose this
Candidates may confuse governance (Policy) with access control (RBAC), thinking that restricting locations or enforcing tags is about permissions rather than compliance rules.
✗Create a read-only lock on each subscription.Wrong answer — click to see why▾
Why this is wrong here
Read-only locks prevent modifications to resources but do not enforce governance rules like tag auditing or location restrictions. The question requires policy enforcement, not resource locking.
★ When this WOULD be the correct answer
A question asks: 'You need to prevent accidental deletion of critical resources in a subscription. What should you do?' In that scenario, applying a read-only lock on the subscription would be correct.
Why candidates choose this
Candidates may confuse locks with policy enforcement, thinking that preventing changes can also enforce compliance rules, but locks only block modifications, not audit or deny specific configurations.
Analysis generated from the official AZ-104blueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
Go deeper
Related to this question
Learn chapter
Privileged Identity Management (PIM)
Key term
Scope
In IT, scope defines the boundaries, goals, and deliverables of a project, assessment, or engagement, specifying what is included and what is excluded.
Key term
Azure Policy
Azure Policy is a service in Microsoft Azure that lets you create, assign, and manage rules to ensure your resources stay compliant with your company standards and service-level agreements.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This AZ-104 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the AZ-104 exam.