- A
Deny
Why wrong: The 'Deny' effect blocks the creation or modification of resources that do not comply with the policy. Since the team wants to allow untagged VMs to be created and only report on them, this effect is too restrictive.
- B
Audit
The 'Audit' effect logs a compliance warning and marks resources as non-compliant without preventing their creation or modification, which matches the team's requirement for reporting only.
- C
Append
Why wrong: The 'Append' effect automatically adds specified fields (such as tags) to a resource during creation or update. While it can enforce tagging, it modifies the resource, which goes beyond just reporting.
- D
Disabled
Why wrong: The 'Disabled' effect turns off the policy definition, meaning it performs no evaluation or enforcement. This would not produce any compliance reports.
Quick Answer
The answer is Audit. This Azure Policy effect is the correct choice because it evaluates resources against the policy rule and reports non-compliant resources in the compliance dashboard without blocking creation or modification, exactly as the governance team requires for identifying untagged VMs. Unlike Deny or DeployIfNotExists, Audit simply logs the non-compliance as a warning in the activity log and marks the resource as non-compliant, giving full visibility without enforcement. On the AZ-900 exam, this tests your understanding of Policy effects and their behavioral differences—a common trap is confusing Audit with Deny, where Deny actively blocks deployment. Remember that Audit is for reporting only, making it the go-to effect when you need to see violations without interrupting workflows. A helpful memory tip: “Audit alerts, Deny defends”—if you only need a report, choose Audit.
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 an Azure subscription used by several development teams. The governance team wants to identify any virtual machines that are not tagged with a mandatory 'CostCenter' tag. The team does not want to block the creation of untagged VMs; they only want to report on non-compliant resources in Azure Policy's compliance dashboard. Which Azure Policy effect should they use in their policy definition?
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 enables Azure Policy to evaluate resources against the policy rule and report non-compliant resources in the compliance dashboard without blocking resource creation or modification. Since the governance team only wants visibility into untagged VMs, Audit logs the non-compliance as a warning in the activity log and marks the resource as non-compliant, but does not prevent the VM from being deployed.
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 or modification of resources that do not comply with the policy. Since the team wants to allow untagged VMs to be created and only report on them, this effect is too restrictive.
- ✓
Audit
Why this is correct
The 'Audit' effect logs a compliance warning and marks resources as non-compliant without preventing their creation or modification, which matches the team's requirement for reporting only.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Append
Why it's wrong here
The 'Append' effect automatically adds specified fields (such as tags) to a resource during creation or update. While it can enforce tagging, it modifies the resource, which goes beyond just reporting.
- ✗
Disabled
Why it's wrong here
The 'Disabled' effect turns off the policy definition, meaning it performs no evaluation or enforcement. This would not produce any compliance reports.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse 'Audit' with 'Deny' because they assume any policy effect must block non-compliant resources, but Azure Policy's Audit effect is specifically designed for reporting-only scenarios without enforcement.
Detailed technical explanation
How to think about this question
Under the hood, the Audit effect triggers a compliance evaluation that writes a 'PolicyAudit' event to the Azure Activity Log and sets the resource's compliance state to 'NonCompliant' in the Azure Policy compliance dashboard. Unlike Append, which uses a 'modify' operation to add tags at deployment time, Audit is purely observational and does not alter the resource definition, making it ideal for governance teams that need visibility without enforcement.
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
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Describe Azure management and governance — study guide chapter
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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 enables Azure Policy to evaluate resources against the policy rule and report non-compliant resources in the compliance dashboard without blocking resource creation or modification. Since the governance team only wants visibility into untagged VMs, Audit logs the non-compliance as a warning in the activity log and marks the resource as non-compliant, but does not prevent the VM from being deployed.
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
This AZ-900 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-900 exam.
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