- A
deny
Why wrong: The 'deny' effect blocks the creation of resources that are non-compliant. This would prevent resources from being created if they lack the required tag, which is not what the team wants. They only want to identify missing tags without blocking deployment.
- B
audit
The 'audit' effect creates a compliance report entry in the activity log and marks the resource as non-compliant in policy compliance, but does not block the resource creation or modify it. This meets the requirement to identify missing tags without disrupting deployment.
- C
deployIfNotExists
Why wrong: The 'deployIfNotExists' effect automatically deploys a resource (or modifies the resource) to make it compliant when a condition is met. If used, it would add the missing tag automatically, which modifies the resource. The team only wants to identify non-compliant resources, not automatically fix them.
- D
append
Why wrong: The 'append' effect adds additional fields to the resource during creation or update to make it compliant. For a missing tag, it would add the tag with a default value. This modifies the resource, which is not desired. The team only wants to generate a compliance report without changing resources.
Quick Answer
The answer is the audit effect, because it allows the governance team to identify resources missing the 'CostCenter' tag without blocking their creation. Azure Policy’s audit effect works by evaluating resources against the policy rule and logging a compliance event in the activity log for any non-compliant resources, which then populates the Azure Policy compliance dashboard automatically—perfectly meeting the requirement for a generated compliance report. On the Microsoft Azure Fundamentals AZ-900 exam, this scenario tests your understanding of the difference between audit and deny effects; a common trap is choosing deny because it enforces tagging, but the question explicitly says “without preventing creation,” which eliminates deny. Remember that audit is for “watch and report” while deny is for “block and enforce.” A simple memory tip: think of audit as a security camera that records violations but never stops you from entering the building.
AZ-900 Describe Azure management and governance Practice Question
This AZ-900 practice question tests your understanding of describe azure management and governance. 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. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. 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 company has a policy that all Azure resources must have a 'CostCenter' tag. The governance team wants to identify any resources that are missing the tag without preventing their creation. They need a compliance report generated automatically showing all non-compliant resources. Which Azure Policy effect should they use?
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
audit
The 'audit' effect is correct because it allows the company to monitor and report on resources that are missing the 'CostCenter' tag without blocking their creation. Azure Policy's audit effect logs a compliance event in the activity log for non-compliant resources, which can then be used to generate automatic compliance reports via Azure Policy's compliance dashboard or exported to Log Analytics. This meets the requirement of identifying non-compliant resources while not preventing their deployment.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
deny
Why it's wrong here
The 'deny' effect blocks the creation of resources that are non-compliant. This would prevent resources from being created if they lack the required tag, which is not what the team wants. They only want to identify missing tags without blocking deployment.
- ✓
audit
Why this is correct
The 'audit' effect creates a compliance report entry in the activity log and marks the resource as non-compliant in policy compliance, but does not block the resource creation or modify it. This meets the requirement to identify missing tags without disrupting deployment.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
deployIfNotExists
Why it's wrong here
The 'deployIfNotExists' effect automatically deploys a resource (or modifies the resource) to make it compliant when a condition is met. If used, it would add the missing tag automatically, which modifies the resource. The team only wants to identify non-compliant resources, not automatically fix them.
- ✗
append
Why it's wrong here
The 'append' effect adds additional fields to the resource during creation or update to make it compliant. For a missing tag, it would add the tag with a default value. This modifies the resource, which is not desired. The team only wants to generate a compliance report without changing resources.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse 'audit' with 'deny' or 'append' because they think tagging enforcement requires blocking or automatically adding tags, but the question explicitly states that resource creation must not be prevented, making 'audit' the only effect that purely reports without intervention.
Detailed technical explanation
How to think about this question
Under the hood, Azure Policy's audit effect evaluates resources at create, update, and existing resource discovery intervals, writing a JSON-based compliance record to the Azure Activity Log under the 'Administrative' category. This record includes the resource ID, policy definition ID, and a timestamp, which can be consumed by Azure Monitor alerts or Logic Apps to trigger custom workflows. In a real-world scenario, a company might combine audit with a scheduled Azure Automation runbook to email a weekly report of non-compliant resources, ensuring governance without blocking agile deployments.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
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
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
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FAQ
Questions learners often ask
What does this AZ-900 question test?
Describe Azure management and governance — This question tests Describe Azure management and governance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: audit — The 'audit' effect is correct because it allows the company to monitor and report on resources that are missing the 'CostCenter' tag without blocking their creation. Azure Policy's audit effect logs a compliance event in the activity log for non-compliant resources, which can then be used to generate automatic compliance reports via Azure Policy's compliance dashboard or exported to Log Analytics. This meets the requirement of identifying non-compliant resources while not preventing their deployment.
What should I do if I get this AZ-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
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