I know that it's possible to set execute permissions for a stored procedure to a database role or user. My question is, how is access to any tables that the SP accesses determined? Does the principal who calls the SP also have to have requisite permissions for the underlying objects that are touched by the SP?
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One only needs to ensure that the SP and objects that the SP accesses all have the same owner (ownership chaining rules)--then SQL Server doesn't look at permissions of chained objects. From the online SQL Server documentation: