- A
Application permissions with the client credentials flow, authenticating with the app's client ID and secret (or certificate)
Application permissions are granted by an admin via the app registration manifest. The client credentials flow does not require user interaction — the service presents its own credentials to the token endpoint and receives a token scoped to the application. This is the standard pattern for background services, daemons, and scheduled jobs that call Microsoft Graph.
- B
Delegated permissions with the authorization code flow, initiating a browser redirect to collect user consent
Why wrong: The authorization code flow requires an interactive browser session where a user signs in and grants consent. A background pipeline running on a schedule cannot open a browser — there is no user present to authenticate. Delegated permissions require a user token.
- C
Delegated permissions with the device code flow, prompting a user to authenticate on a separate device
Why wrong: The device code flow still requires a human to open a browser and enter a code. It is designed for devices with limited input capabilities (TVs, IoT devices), not for fully automated background jobs. A scheduled job cannot wait for a human to complete authentication.
- D
Application permissions with the on-behalf-of flow, passing the calling user's token to the Graph API
Why wrong: The on-behalf-of (OBO) flow is used when a middle-tier API receives a user token and needs to call a downstream API on the user's behalf. It requires an incoming user access token. A background daemon has no incoming user token to exchange, so OBO cannot be used.
AZ-204 Practice Question: Daemon service calling Microsoft Graph with…
This AZ-204 practice question tests your understanding of implement azure security. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. A key principle to apply: application permissions. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A background data pipeline runs on a schedule and must read user profile data from Microsoft Graph. No user is present during execution. The service authenticates to Microsoft Entra ID and calls the Graph API. Which permission type and OAuth 2.0 flow are correct for this scenario?
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
Application permissions with the client credentials flow, authenticating with the app's client ID and secret (or certificate)
This scenario requires a background service to access Microsoft Graph without any user interaction. Application permissions are designed for such non-interactive, service-to-service calls, and the client credentials OAuth 2.0 flow (defined in RFC 6749 section 4.4) allows the app to authenticate using its own identity (client ID and secret or certificate) to obtain an access token. Delegated permissions would be incorrect because they require a signed-in user context, which is absent here.
Key principle: application permissions
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Application permissions with the client credentials flow, authenticating with the app's client ID and secret (or certificate)
Why this is correct
Application permissions are granted by an admin via the app registration manifest. The client credentials flow does not require user interaction — the service presents its own credentials to the token endpoint and receives a token scoped to the application. This is the standard pattern for background services, daemons, and scheduled jobs that call Microsoft Graph.
Related concept
application permissions
- ✗
Delegated permissions with the authorization code flow, initiating a browser redirect to collect user consent
Why it's wrong here
The authorization code flow requires an interactive browser session where a user signs in and grants consent. A background pipeline running on a schedule cannot open a browser — there is no user present to authenticate. Delegated permissions require a user token.
- ✗
Delegated permissions with the device code flow, prompting a user to authenticate on a separate device
Why it's wrong here
The device code flow still requires a human to open a browser and enter a code. It is designed for devices with limited input capabilities (TVs, IoT devices), not for fully automated background jobs. A scheduled job cannot wait for a human to complete authentication.
- ✗
Application permissions with the on-behalf-of flow, passing the calling user's token to the Graph API
Why it's wrong here
The on-behalf-of (OBO) flow is used when a middle-tier API receives a user token and needs to call a downstream API on the user's behalf. It requires an incoming user access token. A background daemon has no incoming user token to exchange, so OBO cannot be used.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse application permissions with delegated permissions, mistakenly thinking a user context is always required for Graph API calls, but the client credentials flow is the correct choice for any background service that operates without a signed-in user.
Detailed technical explanation
How to think about this question
Under the hood, the client credentials flow obtains a token from the Microsoft Entra ID (formerly Azure AD) token endpoint (https://login.microsoftonline.com/{tenant}/oauth2/v2.0/token) by sending the client ID and client secret or certificate assertion. The resulting token contains the app's identity as the subject (sub claim) and includes roles defined in application permissions, not scopes. A real-world scenario is a nightly job that reads all user profile data from Microsoft Graph using the User.Read.All application permission, which requires admin consent granted once during app registration.
KKey Concepts to Remember
- application permissions
- client credentials flow
- daemon service
- Microsoft Entra ID
- delegated vs application permissions
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
application permissions
Real-world example
How this comes up in practice
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
What to study next
Got this wrong? Here's your next step.
Review application permissions, then practise related AZ-204 questions on the same topic to reinforce the concept.
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Implement Azure security — study guide chapter
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FAQ
Questions learners often ask
What does this AZ-204 question test?
Implement Azure security — This question tests Implement Azure security — application permissions.
What is the correct answer to this question?
The correct answer is: Application permissions with the client credentials flow, authenticating with the app's client ID and secret (or certificate) — This scenario requires a background service to access Microsoft Graph without any user interaction. Application permissions are designed for such non-interactive, service-to-service calls, and the client credentials OAuth 2.0 flow (defined in RFC 6749 section 4.4) allows the app to authenticate using its own identity (client ID and secret or certificate) to obtain an access token. Delegated permissions would be incorrect because they require a signed-in user context, which is absent here.
What should I do if I get this AZ-204 question wrong?
Review application permissions, then practise related AZ-204 questions on the same topic to reinforce the concept.
What is the key concept behind this question?
application permissions
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Last reviewed: Jun 11, 2026
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