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MS-102 Deploy and manage a Microsoft 365 tenant Practice Question

You are the Microsoft 365 administrator for a company that has a Microsoft 365 E5 tenant. The security team requires that all administrative actions performed in the Microsoft 365 admin center and Microsoft Entra admin center be retained for seven years. You need to configure the appropriate audit log retention. What should you do?

⚠ Common exam trap

The trap here is assuming that Microsoft 365 E5 licensing automatically provides extended audit retention or that a simple toggle in the admin center can change it.

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

✓

In the Microsoft Purview compliance portal, create an audit retention policy that applies to the admin activities and set the retention period to seven years.

To retain audit records for longer than the default period, you must create an audit retention policy in Microsoft Purview. This policy can target specific activities, such as admin actions, and set a custom retention duration up to 10 years. Changing default settings or relying on licenses alone does not extend retention.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    Enable a Microsoft Entra diagnostic setting to export audit logs to an Azure Log Analytics workspace with a seven-year retention period.

    Why it's wrong here

    Microsoft Entra diagnostic settings can export logs to Log Analytics, but this is separate from Microsoft 365 audit logs and does not cover all admin actions in the Microsoft 365 admin center. It also requires additional configuration and cost, and is not the native solution for retaining Microsoft 365 audit records.

  • ✗

    Assign Microsoft 365 E5 Compliance licenses to all administrators and rely on the default retention.

    Why it's wrong here

    While E5 Compliance licenses enable advanced features, the default audit log retention for E5 is 180 days, not seven years. Simply assigning licenses does not extend retention. An audit retention policy is still required to meet the seven-year requirement, so this option is insufficient.

  • ✓

    In the Microsoft Purview compliance portal, create an audit retention policy that applies to the admin activities and set the retention period to seven years.

    Why this is correct

    Audit retention policies in Microsoft Purview allow you to retain specific audit records for a custom duration, up to 10 years, independent of the default tenant retention. Applying the policy to admin activities ensures those events are kept for seven years, meeting the security team's requirement without affecting other workloads.

  • ✗

    In the Microsoft 365 admin center, change the default audit log retention period to seven years.

    Why it's wrong here

    There is no setting in the Microsoft 365 admin center to change the default audit log retention period. Default retention is fixed based on licensing (180 days for E5), and customization requires audit retention policies in Microsoft Purview. This option would not achieve the required seven-year retention.

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Written and reviewed by Johnson Ajibi, MSc IT Security

Senior Network & Security Engineer · founder of Courseiva

Last reviewed September 2026 · checked against the official Microsoft exam blueprint

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