Connecting to Microsoft D365 CE with Entra ID impersonation is the recommended authentication method for most dox42 D365 CE and Dataverse use cases. See Registering the dox42 App in Microsoft Entra ID and Configuring the dox42 app registration in Entra ID for the steps to perform.
Note
However, in some scenarios, for example when using Microsoft Power Automate or PowerApps (see also Generating D365 CE | Dynamics CRM Documents from Flows and Power Apps), the connection via an Entra ID application user, as well as a client secret or certificate is needed.