Last Updated on July 21, 2026 by Satyendra
Microsoft 365 is where your business resides – emails in Exchange Online, files in SharePoint and OneDrive, collaboration conversations in Teams, and identities in Entra ID. Microsoft 365 auditing enables companies to collect, document, and review user activities, admin actions, and significant system changes.
Effective auditing is not a one-time setup; rather it is a continuous process that connects operations, risk management, and compliance monitoring into a unified security program.
Whether you’re responding to a potential security breach or simply improving visibility into day-to-day operations, Microsoft 365 auditing provides the evidence needed to understand who did what, when they did it, and where the activity originated.
What is Microsoft 365 Auditing?
Microsoft 365 auditing refers to the process of recording and monitoring activities performed by users and administrators across Microsoft services. These activities are recorded in Microsoft Purview Audit Logs. It captures supported user, administrator, and system activities in audit logs by recording who performed the action, what occurred, when it occurred, and where it took place.
Essentially, an audit log responds to four main queries:
- Who performed the action (the user or admin account involved)
- What operation was executed (for example, file deletion, sign-in, mailbox permission change)
- When the action occurred (timestamp)
- Where the action took place (which service, device, or location)
It’s worth distinguishing between two related but different concepts:
- Activity logs are unprocessed, minute-by-minute logs generated within Microsoft 365 as users or administrators perform different operations. These are the raw audit events.
- Audit reports are curated views built from that raw data, often filtered, summarized, or formatted to answer a specific question, such as “who accessed this file” or “what changes were made to admin roles this quarter”.
Microsoft’s native auditing capabilities are delivered through Microsoft Purview Audit, which collects and stores activity data from across Microsoft 365 workloads in a centralized location. It gives organizations a built-in starting point for searching and reviewing audit records without needing a separate tool.
In most Microsoft 365 tenants, unified auditing is enabled by default. However, administrators should verify that auditing is enabled and that the required audit licensing and retention settings meet their organization’s requirements.
Why is Microsoft 365 Auditing Important?
Microsoft 365 auditing is the ongoing process of collecting and analyzing the actions of users and systems, aiming at ensuring accountability, uncover misuse, and verify compliance. The reasons why it is considered important are outlined below:
- Detect Suspicious User Activity: Suspicious user activity includes unusual sign-in patterns, unexpected file downloads, or irregular email forwarding rules, all of which can indicate a compromised account. Audit logs help trace these patterns.
- Investigate Security Incidents Faster: If an incident occurs, the team can quickly reconstruct the sequence of events with the support of an audit trail, which shortens the time window between discovery and remediation.
- Monitor Administrator and Permission Changes: Privileged accounts carry significant risk. Auditing tracks changes to admin roles, group memberships, and access rights so you know exactly who granted access to what, and when.
- Track Access to Sensitive Data: Whether it’s a confidential SharePoint site or a finance team’s shared mailbox, auditing shows who accessed sensitive content and what they did with it.
- Meet Compliance Requirements: Many regulatory frameworks require organizations to demonstrate control over data access and changes. Audit logs provide evidence for internal reviews and third-party audits to prove that they are compliant.
- Improve Accountability and Visibility: When users know that all their activities are being recorded, both administrators and end users are more likely to act responsibly because they know their actions are traceable.
What Should You Audit in Microsoft 365?
Not all activity carries equal weight. The table below outlines the key areas to focus your auditing efforts on:
| Microsoft 365 Service | What to Audit |
|---|---|
| Exchange Online | Mailbox access, email forwarding rule changes, mailbox permission changes, message deletions |
| SharePoint Online | File and folder access, sharing and permission changes, external sharing events, site collection changes |
| OneDrive | File uploads/downloads, sharing links created, deleted and restored files |
| Microsoft Teams | Channel and team creation/deletion, guest access changes, file sharing within chats, external sharing |
| Microsoft Entra ID | Sign-in activity, failed sign-ins, role assignments, Conditional Access policy changes |
| Microsoft 365 Admin | Configuration changes, policy updates, license updates, admin actions |
Common Challenges with Native Microsoft 365 Auditing
While Microsoft 365 provides solid built-in auditing, using it effectively at scale comes with practical challenges:
- Audit Data Spread Across Multiple Services: Audit data is centralized in Microsoft Purview Audit, but investigating activity across multiple Microsoft 365 workloads can still require filtering, correlating, and interpreting events from different services.
- Time-Consuming Searches During Investigations: Searching through native audit logs can be time-consuming and requires technical expertise to search audit logs, especially across a long time span or multiple teams.
- Limited Context when Correlating Events: Native auditing is largely reactive; detecting suspicious behavior usually requires additional setup like external notification systems or other tools to help track such events
- Retention Limitations Depend on Licensing: Audit log retention depends on Microsoft 365 licensing. Standard audit retention is available with most enterprise licenses, while longer retention periods and advanced auditing capabilities require Microsoft Purview Audit (Premium), included with Microsoft 365 E5 or available as an add-on.
- Manual Report Generation: Building reports for compliance reviews or management often requires exporting and manipulating raw data manually. This process is time-consuming and prone to human error during manual manipulation of data.
- Limited Real-time Alerting Without Additional Tools: Microsoft Purview Audit is primarily designed for investigation rather than real-time detection. While Microsoft Defender, Microsoft Sentinel, and Purview alerting can provide notifications, they require additional configuration or licensing.
Best Practices for Microsoft 365 Auditing
Below are some of the Microsoft 365 auditing best practices that highlight the usefulness of your audit data:
- Enable auditing across all Microsoft 365 workloads, so you’re not left with blind spots in any one service.
- Review privileged account activity regularly since admin accounts pose the greatest risk if compromised.
- Monitor permission changes to catch unauthorized escalation of access rights early.
- Configure alerts for high-risk events such as mass file deletions, unusual sign-ins, or security policy changes using Microsoft Defender, Microsoft Sentinel, Microsoft Purview, or another monitoring solution.
- Retain audit logs appropriately based on your organization’s compliance and investigative needs.
- Review audit reports regularly rather than only reacting after an incident occurs.
How Lepide Simplifies Microsoft 365 Auditing
While Microsoft provides native audit logs, investigating activity across multiple Microsoft 365 workloads can be slow and manual, especially when you’re trying to piece together a timeline that spans Exchange, SharePoint, OneDrive, Teams, and Entra ID.
Lepide Auditor for Microsoft 365 allows security teams to centralize audit data from these Microsoft 365 services on a centralized platform where they can observe user behaviors, conduct investigations, detect threats, and generate compliance reports much more efficiently.
Key capabilities include:
- Centralized auditing across Microsoft 365 Workloads provides a unified view of Exchange, SharePoint, OneDrive, Teams, and Entra ID data.
- Real-time alerts for suspicious user and administrative activity across monitored Microsoft 365 workloads allow security teams to respond immediately while an issue is occurring instead of after the fact.
- Detailed audit trails without manual intervention or digging through raw logs, showing who performed an action, what they did, and when.
- Permission change monitoring to flag unauthorized or unexpected access escalations.
- User behavior analytics that can uncover suspicious behavior that a simple rule-based alert might not catch.
- Pre-built compliance and security reports eliminate the need for manual intervention and save effort when generating reports.
- Visibility into sensitive data access and external sharing, helping prevent data leakage.
Still auditing Microsoft 365 the hard way? Schedule a demo with one of our engineers today and see how Lepide simplifies permissions tracking, log reviews, and compliance
Frequently Asked Questions
Yes. Native auditing in Microsoft 365 is available through Microsoft Purview Audit, which logs user and admin activity from Exchange Online, SharePoint Online, OneDrive, Teams, and Entra ID.
Audit logs generally include sign-ins, file access and sharing, mailbox activity, permission and role changes, and administrative actions, depending on the Microsoft 365 workload and licensing.
Retention periods depend on the Microsoft 365 license and whether Microsoft Purview Audit (Premium) is available. Organizations with longer compliance or investigation requirements should review their configured retention period and licensing.
A minimum set of audit targets for an organization should consist of Exchange Online, SharePoint Online, OneDrive, Teams, and Entra ID and covering all administrative and privileged account activities.
Microsoft Purview Audit performs native audit logging, whereas solutions like Lepide provide a central location, real-time notifications, behavior analysis, and a simplified reporting.
