The 'Azure AD Service Principal Created' detection rule identifies the creation of a Service Principal in an Azure Active Directory (Azure AD) environment. This is accomplished by monitoring Azure AD event logs, specifically looking for the 'Add service principal' operation. Such an operation is crucial to monitor, as Service Principals can potentially be exploited by attackers to establish persistence within Azure environments, sidestepping multi-factor authentication (MFA) and conditional access measures. The ability to create a Service Principal could allow unauthorized users to gain single-factor access and engage in malicious activity without detection. Therefore, detecting this operation is key for maintaining security and preventing potential unauthorized access to sensitive Azure resources.