What is Conditional Access Report-Only mode?
Not too long ago, Azure Conditional Access introduced a new feature that allows Azure Active Directory administrators to test conditional access policies and its impact without actually enforcing the policy — ie. Report-Only mode.
For starters, Azure Conditional Access allows Azure Active Directory (Azure AD) administrators to enforce a specific set of conditions to be satisfied before a user (or group) can access specific resources within Azure. For example, a policy could be something simple as, ‘Enforce all users to go through MFA in order to gain access to the Azure portal“. Or, “Only users connected to the On-Premises network can gain access to the Azure portal.”
Conditional Access is one of the many layers of implementing a Zero-trust network/environment. More on that in another post…
Implementing Conditional Access policies introduces a lot of challenges to end-users as sometimes it is difficult to determine the level of impact to the end-user(s). Report-Only mode allows for a Conditional Access administrators and the policy to determine the level of impact to users before actually enforcing the policy.
In the example below, I have created a Conditional Access policy with the following conditions and controls before a user can gain access to an Azure application. In this example, that application is Azure Portal.
Overview:
All Guest Users, must go through MFA in order to be granted access to Azure Management Portal. — pretty simple. Let’s see how this is setup, and the effects of Report-Only mode.
To begin, navigate to the Azure Active Directory service within the Azure Portal. Some base requirements, you need to have an Azure AD P1 or P2 license, and you the administrator must have Conditional Access Administrator (Azure AD role) as a minimum.
Create a policy, and give it some name followed by providing various requirements/conditions/controls.

Next we need to specify the user/users/group that this policy will be applicable to (or not, see the Exclude function).

Next, we need to specify the application this policy will be applicable to. Here I have selected the Azure Management Portal (Microsoft Azure Management) as the Cloud app.

Next, we need to either block or grant access to the users and the application once they pass the controls. In this case, the user must go through MFA in order to gain access to the Cloud app.

Finally we will save our configuration and leave the policy as Report-Only.

Now we can navigate to the Sign-In logs, and audit and validate our policy. Again, since this is a Report-Only policy, we can see the level of impact it would have caused to our end-users.

For more on Azure AD Conditional Access, please feel free to visit the following Microsoft URL, https://docs.microsoft.com/en-us/azure/active-directory/conditional-access/.